Betting against the market is risky, Lyxor research finds
Lyxor Asset Management has published a White Paper analysing the risk/return profiles of different strategies, which finds that betting against the market carries much higher risk than following the market trend.
The research looked at “the mechanisms by which such widespread
investment strategies as Dollar Cost Averaging (DCA) or the systematic search for Entry Points may lead to bankruptcy if associated risks are not identified and contained.”
It also looked for answer to questions such as:
– Which strategies benefit from market volatility?
– What are the best and worse possible scenarios for a given strategy?
– What risks are associated with strategies that play the mean-reversion theme?
To read the full White Paper click here: White Paper 7 – Dynamic Strategy Risk Return