Re:GameStop Is Rage Against the Financial Machine
by smabie on Wednesday January 27, 2021 @11:51PM
(#25938337)
holding a hedged portfolio (with shorts) is less risky than a long only portfolio in the vast majority of cases.
Moreover some asset that is risky on it's own can decrease the risk of the entire portfolio. From a quantitative perspective, specific risk from an asset is largely irrelevant (and doesnt carry a risk premium), because it can be diversified away to 0
Moreover some asset that is risky on it's own can decrease the risk of the entire portfolio. From a quantitative perspective, specific risk from an asset is largely irrelevant (and doesnt carry a risk premium), because it can be diversified away to 0