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What Hedge Funds Really Do by Tucker Balch, Philip J. Romero

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Absolute return, 6, 111, 131

Active investment management, 56

Active portfolio management

breadth, 65

Buffett, Warren, 59

diversification, 61–62

frequent trading, 62–63

information coefficient, 65

information ratio, 64–65

performance, , 60–61

stocks, 59

Actual vs. adjusted stock price data, 87

Adjusted price. See Historical price

Alphas, Betas, and Correlations (ABCs)

beta and correlation, 49, 51

meaning, 121

scatter graph, 50

SPX and XOM, 49

American Express (AXP), 59

Arbitrage

meaning, 12, 21, 121

phenomenon, 22

SAC Capital, 23–24

statistical arbitrage, 22

strategies, 21

Asset allocation, 78, 121

Asset-based estimates and valuation, 38–39. See also Book value

Assets under management (AUM), 10, 121

Back testing strategies

components, ...

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