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Asymmetric Investment Returns

What is Risk Mitigation?  Thumbnail

What is Risk Mitigation?

Risk mitigation refers to the process of identifying, assessing, and taking actions to minimize or control the potential negative impacts of risks on a project, organization, or an investment portfolio. Risks are uncertainties that have the potential to cause harm, a loss, disrupt operations, or negatively affect the achievement of objectives. Risk mitigation aims to reduce the probability of these risks occurring and/or minimize their potential consequences if they do occur.

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What is Convexity?  Thumbnail

What is Convexity?

An option has convexity because the relationship between the price of the underlying asset and the value of the option is not linear.

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Citi Panic Euphoria Model Remains Elevated Thumbnail

Citi Panic Euphoria Model Remains Elevated

We actively monitor several investor sentiment gauges that indicate how optimistic or pessimistic investors are about the stock market. One of the sentiment indicators we monitor is the Citigroup Panic/Euphoria Model. When it reaches an extreme, I comment on it here.

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Implied Volatility is Often Overstated Relative to Realized Volatility  Thumbnail

Implied Volatility is Often Overstated Relative to Realized Volatility

The Cboe Implied VIX Index is a measure of expected future "implied" volatility. The Cboe® Realized Volatility Index is designed to indicate the magnitude of actual realized daily price movements by measuring the annualized standard deviation in the daily price return of an underlying over a specific period.

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