Active Equity Management by Xinfeng Zhou

By Xinfeng Zhou

Lively fairness administration offers a finished realizing of technical, basic, and financial signs utilized in equities buying and selling. It explores intimately how such signs might be created, carefully demonstrated and effectively carried out. jam-packed with practitioner insights derived from years of expertise within the hedge fund undefined, and supported with educational conception, lively fairness administration offers an in-depth evaluate of uncomplicated monetary thoughts, examines information resources important for equities buying and selling, and delves into renowned seasonal results and marketplace symptoms. It additionally highlights top practices in version improvement, portfolio development, threat administration, and execution. In combining topical pondering with the most recent traits, learn, and quantitative frameworks, lively fairness administration may also help either the beginner and the veteran practitioner comprehend the intriguing global of equities buying and selling.

* Covers broad info assets to construct making an investment info, perception and conviction edges
* Examines seasonal results, explores fiscal & marketplace signs to make higher buying and selling decisions
* Addresses technical and primary sign development and checking out
* Explains dynamic issue timing concepts, portfolio development and administration
* stories ordinary ways for trade-level and portfolio-level functionality dimension
* Discusses implementation, buying and selling price research and turnover administration

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The Patent Scorecard uses a systematic approach to quantify the intellectual property of companies and provides scores to rank the technology innovation of different companies. 49 Additional Data In addition to the price and volume data used in technical analysis and fundamental data used in fundamental analysis, active investors continue to look for new data sources to extract useful information and to gain an edge over competitors. Some investors use news feeds and internet data to quickly capture new information and gauge market sentiment; some analyze economic links among different companies; some others explore information from other markets such as the options market.

Since many updates are not always available through newswires, capturing these updates may help these investors gain the information edge and make investment decisions before other investors do. Economic Links A company is economically linked to many other companies. It relies on suppliers for raw materials, depends on customers for revenues, and competes with other firms in the industry. It is important for investors to understand a firm’s economic links in order to understand its financials. Information on a company’s economic links is scattered in a company’s earnings reports, SEC filings, and press releases.

As we will discuss in the following chapters, equity hedge funds explore the same strategies and build similar investment processes as traditional active equity mutual funds or institutional funds. The difference lies in a hedge fund’s flexibility to short sell, use leverage, and trade derivatives as well as in performance evaluation: Most active mutual funds are long only vehicles and harvest positive alpha by investing in stocks that are expected to outperform the market. Equity hedge funds short individual stocks or indices to hedge market/industry exposure as well as harvest the negative alpha of individual stocks.

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