Which type of approach to absolute return targets is most likely to lead to a misleading...

Which type of approach to absolute return targets is most likely to lead to a misleading correlation with the S&P500? Market timing approach or Non-directional approach

Expert Solution

Market timing strategy

It is a kind of trading strategy
Where market participant attempt beat the stock market by predicting its movements, buying and selling according to the movement
It is the opposite of buy and hold investment strategy
But it is Feasible for traders, portfolio managers, and other financial professionals
It can be difficult for average individual investors
Absolute return targets is most likely to lead to a misleading correlation with the S&P500 in market timing strategy

Non-directional trading strategy

Directional and non directional strategy are two variation of trading
Non directional strategy is best option for traders who do not want to bet on direction of market
In directional strategy the traders use to think that market runsin a single direction and predict price accordingly
In non directional strategy ,you wont care which direction the underlying is moving,. you can make money in any market
Examples of non directional strategies:calender spread,straddle,iron condor,Butterfly spread

jeff jeffy answered 1 year ago

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Which type of approach to absolute return targets is most likely to lead to a misleading...

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