Finding and Integrating Crisis Hedge Strategies: Improving Equity Portfolio Resilience (opens in new tab)

Most systematic trading strategies are pro cyclical by nature. They perform best when markets trend higher and volatility remains contained. During broad market expansions, equity risk premia, momentum and trend following approaches tend to generate stable positive returns. However, during market crises or extended bear markets, many of these strategies become synchronized. Correlations increase, volatility spikes and traditional diversification weakens. In such environments, portfolios built...