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Leverage Risk

A hedge fund can borrow in order to enhance its overall returns. Borrowing, or using leverage, is a source of both volatility risk and financing...

    Loss Carryforward Provision

    An amount that is equal to the greatest value reached by an investor’s capital account with a hedge fund, adjusted for...

      Tail Hedge

      An adjustment to the number of futures contracts used to hedge a position in an attempt to make the present market exposure...

        Tailing The Hedge

        In the context of futures contracts, it is a small adjustment that has to be made to the formula used...

          Inclusion Bias

          A variation of the survivorship bias that results from inclusion of a new hedge fund into a given index and...

            Backfilling

            A variation of the survivorship bias that results from inclusion of a new hedge fund into a given index and...

              Backfill Bias

              A variation of the survivorship bias that results from inclusion of a new hedge fund into a given index and...

                Absolute Returns

                Returns which a hedge fund can generate, or assumed to be generating, above the risk-free rate, regardless of the prevailing...

                  Absolute Return Fund

                  A hedge fund that aims to generate a stable return regardless of market performance. In other words, it is designed...

                    MVHR

                    It stands for minimum variance hedge ratio; a mathematical tool for determination of the optimal cross hedging ratio. This means...