Boosted.ai, the leading distributed machine learning platform for global investment professionals, announced the release of Hedge Baskets, a product upgrade to Boosted Insights that allows asset managers to create smart hedges using advanced machine learning for data-driven short positions.
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“True to its name, hedging is generally seen as a necessity at hedge funds to protect against downside risk. But the hedging process itself is typically outsourced and overly reliant on shorting well-known indexes, which opens asset managers up to crowding, excess risk and other complications”
With the addition of Hedge Baskets, Boosted Insights now lets portfolio managers bring hedging capabilities in-house. Investors can easily generate short baskets that are:
- Intelligent, using machine learning to find single stock hedges that offset idiosyncratic risks unique to a portfolio
- Transparent, allowing managers to own their hedging process and ensure performance through multiple years of backtesting
- Performant, backed by scenario analyses to ensure that custom hedge baskets outperform shorting of ETFs or indexes
Today, many investment managers outsource their hedging process or rely on historical pricing data to construct their long and short positions. By combining the expertise of portfolio management teams with the power of finance-specific machine learning, Boosted.ai gives investors more control over the process while optimizing positions and mitigating risk.
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When using Hedge Baskets, asset managers control their short book in a simple, straightforward, and data-driven way. Results are fully backtested and different scenarios can easily be retested, allowing for intelligent hedge baskets that can generate higher portfolio returns than a simple beta hedge. The platform also incorporates data on borrow rates and short interest, giving investment managers confidence that their hedge baskets have actionable, executable trade ideas.
“True to its name, hedging is generally seen as a necessity at hedge funds to protect against downside risk. But the hedging process itself is typically outsourced and overly reliant on shorting well-known indexes, which opens asset managers up to crowding, excess risk and other complications,” said Joshua Pantony, Co-Founder and CEO of Boosted.ai. “By adding Hedge Baskets to Boosted Insights, we are giving fund managers more control over the hedging process and allowing them to identify and protect against the non-intuitive risks hiding in their portfolios.”
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