How to generate alpha through dynamic hedging in periods of downtrend
- Posted on October 23, 2024
- By Business News Today
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How to generate alpha through dynamic hedging in periods of downtrend
Dynamic hedging, as practiced by experienced fund managers, mitigates risks through real-time adjustments in long and short positions. A 137-year study by Hurst, Ooi, and Pedersen reveals that such strategies performed well during major financial crises, wars, and high-inflation periods, enhancing returns and providing downside protection.