{"id":6408,"date":"2007-08-08T00:00:00","date_gmt":"2007-08-08T00:00:00","guid":{"rendered":""},"modified":"-0001-11-30T00:00:00","modified_gmt":"-0001-11-30T04:00:00","slug":"harry-potter-meets-hedge-funds","status":"publish","type":"post","link":"https:\/\/hedgeco.net\/news\/08\/2007\/harry-potter-meets-hedge-funds.html","title":{"rendered":"Harry Potter meets hedge funds"},"content":{"rendered":"<table width=\"\" cellspacing=\"7\" cellpadding=\"2\" border=\"0\">\n<tr>\n<td valign=\"top\" class=\"j\">    <\/td>\n<\/tr>\n<\/table>\n<p>FT Alphaville- The world of hedge fund replication has in the past left us a little flummoxed. But having ploughed through the seventh instalment of Harry Potter on the day of its release,we\u00c3\u00a2\u00e2\u201a\u00ac\u00e2\u201e\u00a2re pretty darn confident we can take on all comers when it comes to analysing the adventures of the boy wizard.<\/p>\n<p>  So there was much delight when we happened across a blog posting combining just these two topics. Clarity would be ours at last, surely?<\/p>\n<p>  Guest blogger Tammer Kamel from <a href=\"http:\/\/ilukacg.com\/\" title=\"Iluka\">Iluka Hedge Fund Consulting<\/a>, at <a href=  \"http:\/\/allaboutalpha.com\/blog\/2007\/08\/05\/muggles-looking-for-hogwarts-the-state-of-hedge-fund-replication\/\" title=\"All About Alpha\">All About Alpha<\/a>, writes that if hedge funds are market  wizards, then the clones are muggles looking for Hogwarts. Thus far they don\u00c3\u00a2\u00e2\u201a\u00ac\u00e2\u201e\u00a2t seem to have found the school &#8211; nor have they discovered the chamber of alpha. But, he adds, their efforts are  nonetheless valuable to investors. Kamel says:<\/p>\n<p>  Hedge fund replication is not wizardry at all of course, it is an elegant application of quantitative finance which I find intriguing, albeit for the wrong reasons.<\/p>\n<p>  The right reasons would be a hedge fund product at a lower cost, with more transparency, scalabilty and so on &#8211; which is all desirable provided the clone meets the requisite level of expected  returns. Alas not, says Kamel.<\/p>\n<p>  The cloning techniques I have thus far encountered aim to emulate what hedge funds actually do as opposed to what they are supposed to do.&nbsp; This is a consequence of taking the performance of  the hedge fund collective as their replication objective.&nbsp; But the performance of the collective, or equivalently the average hedge fund, is actually not good.&nbsp; Thus replicating the  average hedge fund is no use to me since the average hedge fund is a bad investment.<\/p>\n<p><strong><a href=\"http:\/\/www.google.com\/news\/url?sa=T&amp;ct=us\/8-0&amp;fd=R&amp;url=http:\/\/ftalphaville.ft.com\/blog\/2007\/08\/08\/6396\/harry-potter-meets-hedge-funds\/&amp;cid=0&amp;ei=cJG5Ron8BoT0rQOS0dWnBA\">ReadComplete Article<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>FT Alphaville- The world of hedge fund replication has in the past left us a little flummoxed. But having ploughed through the seventh instalment of Harry Potter on the day of its release,we\u00c3\u00a2\u00e2\u201a\u00ac\u00e2\u201e\u00a2re pretty darn confident we can take on [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-6408","post","type-post","status-publish","format-standard","hentry","category-syndicated"],"_links":{"self":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/6408","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/comments?post=6408"}],"version-history":[{"count":0,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/6408\/revisions"}],"wp:attachment":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=6408"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=6408"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=6408"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}