This short video from Khan Academy illustrates how to setup a simple long-short hedge (assuming the companies have similar beta or correlation with market). In a long-short strategy, you identify the stocks that will outperform the market and the ones that will under perform the market. Since you can not predict will full confidence as […]
Hedge Fund Strategies
In this video will will analyze the performance of our Long-Short Strategy that we set up, and look at how the hedge performs in different market conditions. We will look at both the scenarios: what happens when the market goes up and what happens when the market goes down.
A news comes out that Company B intends to acquire Company A at $10, which is currently trading at $5. This is an all cash deal. This video analyzes this simple case of merger arbitrage.