r squared
Feed Your Hedge
Read the full article: http://www.condoroptions.com/2008/04/08/feed-your-hedge/
Assuming we’re long anything at this point, what puts would we use as a hedge, and how many do we need? First, we have to figure out how our portfolio moves in relation to the market. We know that four out of five stocks move in the same direction as the market trend, but by how much? Two numbers can give us a pretty good idea: beta and R-squared...
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