Academic Says Correlation Is A Vital But Underappreciated Trading Signal
Robert Kosowski, head of the department of finance and professor of finance at Imperial College Business School, Imperial College London, said correlation is an important and often underappreciated trading signal for investors to determine. “Correlation is traded explicitly using derivatives such as options and swaps, but it also implicitly affects long-short strategies as well as merger arbitrage strategies,” Kosowski said. “Everyone agrees that diversification is important but correlation is relatively understudied,” he added.
Vol Investors Face Challenging Start to Year
What is up with equity volatility?
UBS’ Macro Frameworks Show Opportunities Across Derivatives Markets
UBS officials are utilizing their new macroeconomic frameworks, or macro ‘cookbooks’, to produce a wide opportunity set for derivatives strategies this year. This includes Europe versus U.S. bank call switches as well as more exotic relative value strategies, such as palladiums.
Equity Ebb And Flow - Sunday Roundup, February 11, 2024
Stability for pension plans seems to be bleaker than ever, with institutions like CalPERS sounding the alarm on potential funding ratio pitfalls over the next three decades. Investment volatility has re-emerged as a key concern for public pensions, signaling the risk that market corrections could potentially set back progress in stabilizing funded ratios and trigger higher contributions.
