Hedge funds are called funds, which are essentially different from mutual funds in terms of safety, income and value-added investment concepts. The Fund adopts various trading methods (such as short selling, leverage, program trading, exchange trading, arbitrage trading, derivatives, etc. ) hedge, transpose, hedge, hedge, and make huge profits. Hedging is an act or strategy aimed at reducing risks. However, in the evolution of several decades, hedge funds have lost the original simple connotation of risk hedging and become synonymous with new investment model, that is, based on the latest investment theory and extremely complicated financial market operation skills, making full use of the leverage of various financial derivatives, taking high risks and pursuing high returns.
Different from risk-free hedging, statistical hedging is a kind of risk arbitrage by using the historical statistical law of securities prices. The risk lies in whether this historical statistical law will continue to exist in the future. The main idea of statistical hedging is to find out several pairs of investment varieties (stocks or futures, etc.). ) has the best correlation, and then find out the long-term equilibrium relationship (cointegration relationship) of each pair of investment varieties. When the price difference between a pair of varieties (the residual of the coordination equation) deviates to a certain extent, it begins to open positions-buying relatively undervalued varieties, shorting relatively overvalued varieties, and making profits when the price difference returns to equilibrium. The main contents of statistical hedging include stock matching transaction, stock index hedging, securities lending hedging and foreign exchange hedging transaction. Hedge fund is a concept, and there are many sayings. The definition is two characteristics.
These investment strategies are characterized by manipulating prices and financial markets to make profits. In the most basic hedging operation, the fund manager buys a certain price and a timely put option after buying the stock. The utility of put option is that when the stock price is lower than the price limited by the option, the holder of seller option can sell his own stock at the price limited by the option, thus hedging the risk of stock price decline. In another hedging operation, the fund manager first chooses a bullish industry, buys a few high-quality stocks in this industry, and sells a few inferior stocks in this industry according to a certain proportion. The result of this combination is that if the industry is expected to perform well, the growth of high-quality stocks will exceed other stocks in the same industry, and the gains from buying high-quality stocks will be greater than the losses from shorting low-quality stocks; If the expectation is wrong and the industry stocks don't rise, then the stocks of poor companies will fall much more than those of high-quality stocks, and the profit of short selling stocks will be higher than the loss caused by the decline of buying high-quality stocks. Because of this mode of operation, the early hedge fund can be said to be a form of fund management based on the conservative investment strategy of hedging.