I have used a portfolio analysis framework to capture the dynamic essentials of an unconstrained (long-short) investment management strategy. It is a bare-bones system with only two parameters. These parameters can be measured, and they are linked to familiar investment concepts. This minimalist setup yields a surprisingly abundant set of results. We can characterize the efficiency of the implementation, analyze and explain many aspects of the strategy, and optimize the rate of trading. More important than the specific results is the change in perception. Looking at the portfolio as a moving object provides a new perspective and opens up various interesting possibilities.
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