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Dividends are included in the returns when computing correlations. Hedge funds make bets on stocks over performing or under performing compared to a benchmark.
by rockinghigh 11y ago
Dividends are included in the returns when computing correlations. Hedge funds make bets on stocks over performing or under performing compared to a benchmark. If all stocks perform the same, there is no hedge because the weight of a stock in the portfolio does not impact portfolio return.