Derivatives Use and Risk Taking: Evidence from the Hedge Fund Industry

2009 ◽  
Author(s):  
Yong Chen
Keyword(s):  
Risk Taking ◽  
Hedge Fund ◽  
Fund Industry

Derivatives Use and Risk Taking: Evidence from the Hedge Fund Industry

2011 ◽  
Vol 46 (4) ◽  
pp. 1073-1106 ◽  
Author(s):  
Yong Chen
Keyword(s):  
Risk Reduction ◽  
Risk Taking ◽  
Hedge Funds ◽  
Hedge Fund ◽  
Market Risk ◽  
Risk Shifting ◽  
Large Sample ◽  
Event Risk ◽  
Market State ◽  
Fund Industry

AbstractThis paper examines the use of derivatives and its relation with risk taking in the hedge fund industry. In a large sample of hedge funds, 71% of the funds trade derivatives. After controlling for fund strategies and characteristics, derivatives users on average exhibit lower fund risks (e.g., market risk, downside risk, and event risk), such risk reduction is especially pronounced for directional-style funds. Further, derivatives users engage less in risk shifting and are less likely to liquidate in a poor market state. However, the flow-performance relation suggests that investors do not differentiate derivatives users when making investing decisions.

The Hedge Fund “Industry” and Absolute Return Funds

CFA Digest ◽  
1999 ◽  
Vol 29 (4) ◽  
pp. 43-44
Author(s):  
Laurie Effron
Keyword(s):  
Hedge Fund ◽  
Fund Industry

The Dynamics of the Hedge Fund Industry

CFA Digest ◽  
2005 ◽  
Vol 35 (4) ◽  
pp. 87-90 ◽  
Author(s):  
Frank T. Magiera
Keyword(s):  
Hedge Fund ◽  
Fund Industry

Tailing Tail Risk in the Hedge Fund Industry

2012 ◽  
Author(s):  
Walter Distaso ◽  
Marcelo Fernandes ◽  
Filip Zikes
Keyword(s):  
Hedge Fund ◽  
Tail Risk ◽  
Fund Industry

Aggregate Alpha in the Hedge Fund Industry: A Further Look at Best Ideas

2020 ◽  
Author(s):  
Faryan Amir-Ghassemi ◽  
Andrew Papanicolaou ◽  
Michael Perlow
Keyword(s):  
Hedge Fund ◽  
Fund Industry
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