Volatility Concepts and Tools in Risk Management and Portfolio Construction

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CFA Institute Conference Proceedings Quarterly
December 2011 | Vol. 28 | No. 4 | 13 pages
Source: CFA Institute
Joanne M. Hill

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Abstract

Understanding the dynamics of realized volatility is critical to effective investment management and portfolio risk management. Volatility measures can reach levels well above the median and are trending and mean reverting. Tradable volatility exposure is now available with VIX futures and exchange-traded products benchmarked to VIX futures indices. These tools are useful for modifying portfolio risk based on expected S&P 500 Index volatility rather than shifting fixed-income allocations.

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Topics
Derivatives
    :
  • Futures Markets and Instruments
|
Portfolio Management
    :
  • Risk Management
|
Risk Management
    :
  • Portfolio Risk Management
Credits · About the CE Program
0.5 CE (including 0 SER) Manage CE Credits

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