Tactical Asset Allocation (TAA)

Tactical Asset Allocation (TAA)

Tactical Asset Allocation (TAA)

An asset allocation strategy that allows active departures from the normal asset mix based upon rigorous objective measures of value. Often called active management. It involves forecasting asset returns, volatilities and correlations. The forecasted variables may be functions of fundamental variables, economic variables or even technical variables.



Post sponsored by:

Read More

Systematic risk principle

Systematic risk principle

Systematic risk principle

Only the systematic portion of risk matters in large, well-diversified portfolios. The, expected returns must be related only to systematic risks.



Post sponsored by:

Read More

Systematic risk

Systematic risk

Systematic risk

Also called undiversifiable risk or market risk, the minimum level of risk that can be obtained for a portfolio by means of diversification across a large number of randomly chosen assets. Related: unsystematic risk.



Post sponsored by:

Read More

Synthetics

Synthetics

Synthetics

Customized hybrid instruments created by blending an underlying price on a cash instrument with the price of a derivative instrument.



Post sponsored by:

Read More

Synchronous data

Synchronous data

Synchronous data

Data available at the same time. In testing option-pricing models, the price of the option and of the underlying should be synchronous, representing the same moment in the market.



Post sponsored by:

Read More

Switching

Switching

Switching

Liquidating an existing position and simultaneously reinstating a position in another futures contract of the same type. Symmetric cash matching An extension of cash flow matching that allows for the short-term borrowing of funds to satisfy a liability prior to the liability due date, resulting in a reduction in the cost of funding liabilities.



Post sponsored by:

Read More