Idiosyncratic Risk : An Empirical Analysis, with Implications for the Risk of Relative-Value Trading Strategies /

This paper models the idiosyncratic or asset-specific return of an asset as the return on a portfolio that is long in that asset and short in other assets in the same class, thereby removing the common components of returns. This is the type of 'hedged' position that is held by relative-va...

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Автор: Richards, Anthony
Формат: Журнал
Мова:English
Опубліковано: Washington, D.C. : International Monetary Fund, 1999.
Серія:IMF Working Papers; Working Paper ; No. 1999/148
Онлайн доступ:Full text available on IMF
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Резюме:This paper models the idiosyncratic or asset-specific return of an asset as the return on a portfolio that is long in that asset and short in other assets in the same class, thereby removing the common components of returns. This is the type of 'hedged' position that is held by relative-value investors. Weekly returns data for seven different asset classes suggest that idiosyncratic risk is: higher at times of large return outcomes for the asset class as a whole; positively autocorrelated; and correlated across different asset classes. The implications for risk management are discussed.
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Фізичний опис:1 online resource (33 pages)
Формат:Mode of access: Internet
ISSN:1018-5941
Доступ:Electronic access restricted to authorized BRAC University faculty, staff and students