Research brief 007

The first gap lower. The next six months. Which hedge does which job?

A sudden crash and a grinding bear market create different demands on protection. This paper puts puts and trend in one framework.

The idea worth investigating

Options and trend following respond on different clocks. Noguer i Alonso and Al-Fallouji examine how those responses fit together when the portfolio’s objective is controlling tail losses.

The full analysis examines the study and the practical question behind it: A sudden crash and a grinding bear market create different demands on protection. This paper puts puts and trend in one framework.

Paper-based analysis; no independent house test has been completed.

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See what changes the investment case.

The headline is the starting point. The subscriber analysis takes you through:

  • How each hedge responds to the loss path
  • What the simulation weights actually mean
  • The carry, timing and implementation questions
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