4 ms·

Thanks for the explanation - one question though, how do we know that Melvin (or any other security/fund) is not correlated to the S&P?

• dcolkitt 6y ago
  To be fair, it probably is. Most equity hedge funds are probably closer to a 50% correlation, and should be benchmarked accordingly (i.e. half T-bills/half S&P). Investors would be able to see its historical monthly returns and regress them against the equity index.