Alternative Investments

Alternative Investments Characteristics and Issues


7 Common Characteristics of Alternative Investments – The common characteristics are: diversity (there are many kinds of alternative investments), non-normal and non-linear returns (especially skewness of returns), low liquidity, difficult valuation, limited availability of good benchmarks, legal restrictions and limited availability of alternative investments to some types of investors (often only qualified investors have access), and the absolute necessity and complexity (and high cost) of due diligence.

Non-Normal Return Distribution of Alternative Investments – Non-normal returns represent one of the key characteristics of alternative investments. This page provides a short introduction on (the obviously very complex) issues of alternative investments and hedge fund styles and their implications to return distributions and risks.


4 Benefits of Alternative Investments as Part of Your Portfolio – The main benefits are: diversification potential, inflation hedge, new exposures and opportunities, and higher returns. Of course, given the diversity of alternative investments, not all of these benefits apply always and to all types of investments.


Alternative Investments: Liquidity, Valuation Issues, and Alternative Benchmarks – Of course, alternative investments don’t just have benefits. This page discusses the most common weaknesses and problems.

Alternative Investments Accessibility: Are Hedge Funds Only for the Rich? – Limited accessibility is another characteristic feature of alternative investments. It has two main reasons: risk management and legal restrictions. This page briefly discusses them and their recent developments.

Hedge Fund Styles

Hedge Fund Trading Styles Overview – This is the basic introduction to hedge fund styles. It discusses the why’s, how’s, and who’s of hedge fund style classifications and it also provides a short introduction of the 4 big hedge fund style groups (equity market directional, relative value, corporate restructuring, and macro).

Equity Market Directional Hedge Funds – The most common hedge fund trading style (with the highest number of funds and highest assets under management) is directional equity trading. This page provides an introduction to its characteristics, risks, and numerous sub-styles – from fundamental stock picking to high frequency trading and computer models.

Convergence Trading Hedge Funds – Convergence trading sounds like a sophisticated term, but it is actually quite common trading style – or rather a whole diverse group of trading styles. In general, it means trading one security against another one (buy one and sell the other), with the objective of profiting from the relative changes in price rather than absolute price directions. Such trades are often called spreads. This page provides an introduction to the (also very large and diverse) group of hedge funds applying these trading styles.

Related pages

sample mean formula excelformula to calculate average in excelmacd signalstraddle option strategy exampleimplied volatility vs historical volatilityprice weighted indexesestimating population mean calculatorcall option black scholesmedian function in excelmorgan stanley historical stock pricesquaring negativesetn tickeroption greeks formulastandard deviation frequency calculatorsvxyfinance standard deviation calculatorformula to calculate range in excelderivation of standard deviation formulablack scholes inputsdelta symbol in excelsummation x squared13f sec filingpositive kurtosiscalculate vegawww.cboehow to put power in excel formulaprotective put payoffblack scholes delta calculatornorm.distdefinition of skewness and kurtosisvix realtimemicrosoft stocks historytheta formulacalculate sample mean and standard deviationsample skewnesshow to calculate median in exceloption greeks calculatorvqt etncalculating the intrinsic value of a stockskew statisticsdelta calculator optionsshare price volatility calculatorannualize a numberstraddle positionexcel stdev.svix futures quotesgeorge soros vs warren buffettblack scholes stock option calculatorvix options expirationmedian calculator excelkurtosis skewstandard deviation formula in financecalculating averages on excelblack sholes equationvix index calculationoption calculator excelbuying the vixyahoo stock csvfind the mean variance and standard deviations&p 500 vix short-term futurestrading today black scholes calculatorblackscholes formulalogarithm in excelkurtosis and skewness formulacboe vix settlementsell put option graphgamma function excelchicago board options exchange volatility indexoptions straddle calculatordescriptive statistics calculator