2008 was a watershed year for the investment community as performance and risk management strategies based on historical correlation models were both found wanting. Asset price correlation spiked, eliminating the diversification benefits of traditional portfolios.
Research by Momentum Alternative Investments using objective data and historical performance information demonstrates hedge funds can and do preserve capital during periods of market stress and adding them to traditional portfolios offers investors significant benefits. The research indicates appropriate hedge fund selection increases a balanced portfolio’s risk-adjusted returns.
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