Hedge fund investors are concerned about the high correlation between many hedge funds and the equity markets as a “rotation” has occurred between fund strategies, a report from Morgan Stanley Prime Brokerage observes, a copy of which was reviewed by ValueWalk. Correlations with equity markets are typically a concern of mathematically driven hedge fund allocators who strive for protection of capital during crisis as well as strong absolute returns during good times. The problem for sophisticated hedge fund investors has always been that many funds that have exhibited a relative lack of correlation to the equity markets, zigging when stocks zag,…
Morgan Stanley Notes Mean Reversion Hedge Fund Opportunity
Mark Melin
Mark Melin is an alternative investment practitioner whose specialty is recognizing the impact of beta market environment on a technical trading strategy. A portfolio and industry consultant, wrote or edited three books including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008) and taught a course at Northwestern University's executive education program.