Discussing the topic of overlaying strategies really gets to the heart of one question that keeps reappearing, "why are CTAs non-correlated to equities?" This is a very simple question to ask and is asked with high frequency. But the answer includes many topics to properly answer it. One may say it's the "special sauce" in understanding managed futures. One of the topics of the special sauce is the utilization of overlaying strategies.
For example, let's assume the following of a fictional CTA (Commodity Trading Advisor):
- The CTA trades a diversified systematic trend following model (Core model) in 20 markets in both financial and commodity futures.
- The model can be long, short or READ MORE
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Copyright ©2014 Mark Shore. Contact Mark Shore for permission for republication at email@example.com Mark Shore has more than 25 years of experience in the futures markets and managed futures, publishes research, consults on alternative investments and conducts educational workshops. www.shorecapmgmt.com
Mark Shore is also an Adjunct Professor at DePaul University’s Kellstadt Graduate School of Business, where he teaches the only known accredited managed futures course in the country. He is also a Board Member of the Arditti Center for Risk Management at DePaul University.
Past performance is not necessarily indicative of future results. There is risk of loss when investing in futures and options. Futures and options can be a volatile and risky investment; only use appropriate risk capital; this investment is not for everyone. The opinions expressed are solely those of the author and are only for educational purposes. Please talk to your financial advisor before making any investment decisions.