About Arbitrages

Arbitrage is a commonly used term to denote risk-free trading. The idea behind arbitrage is to take advantage of any price differential between two markets by buying from one and selling into the other. Arbitrage, in its pure form, is risk-free and often referred to as "true arbitrage". Retail traders are not able to indulge in true arbitrage due to a lack of the large amount of capital needed; adequately sized hedge funds, such as Resolute Capital Growth Fund, do not face this problem.

Our market neutral investments utilise quantitative analysis of technical factors to exploit pricing inefficiencies between related assets; in effect, this neutralises exposure to market risk by combining long and short positions.

There are tremendous advantages to having a market-neutral style in an investment portfolio. Notably, returns are independent and uncorrelated to market direction. Volatility is usually low. Returns are often attractive and constant regardless of market or economic downturns. Equity market-neutral strategies often complement other investment strategies, providing a balanced and diversified portfolio.

This strategy can also be classified as an "absolute return strategy", since the return is independent of the performance of the underlying market. In other words, a return may be generated whether the market goes up or down. Absolute return strategies represent an investment style or discipline, and are usually classified as a subset of the alternative asset investment class. The returns derive from Resolute Capital's skills, and not from the overall direction of a traditional market, such as equities or fixed income.