EAB analyzes the portfolio construction and historic return streams to help optimize the performance and effectiveness of our custom hedging solution. Through our proprietary systems and processes, we are able to provide proof of concept to clients and manage expectations.
EAB works with investment firms to combine their core investment process with a custom proprietary hedging strategy. Our hedging strategies are designed to maximize risk adjusted returns and efficiently mitigate downside risk.
EAB uses F(t) OptionsSM risk management technology and extensive volatility database to identify risk and analyze option valuation utilizing proprietary techniques. EAB deploys and manages a suite of tactical and systematic strategies aimed at mitigating risk while seeking to add alpha. All strategies use an “edge” driven approach to investing.
STRATEGIES
EAB works closely with the client’s portfolio manager to understand their investment thesis and return objectives. EAB treats the hedging process as a profit center rather than a loss leader, with the goal of reducing portfolio risk and increasing the probability of success.
DIRECT HEDGING
Direct hedging is the process of implementing hedging structures with high correlations to the underlying security. The advantage of this type of approach may be more predictable outcomes primarily due to a lack of correlation breakdown during stress events.
INDIRECT HEDGING
EAB Investment Group offers a basket of market hedges designed to protect against systemic risk and tail events. The objective is to provide efficient and cost-effective hedges with minimal correlation to flat and up markets. The concepts are well researched, theoretically based, and intuitively executed against historical data on liquidity and crisis-sensitive assets. We work with clients to determine which risk assets could produce the most desired results depending on their underlying portfolios.
The EAB Correlation Defense Index* (EABCDI) is a proprietary multi-asset index from EAB Investment Group, designed as a long-short strategy to deliver returns negatively correlated with the US Equity Market, particularly around market declines. It is rebalanced quarterly, and tracks shifts in correlations and volatility across fixed income, currencies, commodities, and equity sectors to offer unique diversification during market stress or regime changes. Unlike traditional asset allocation or volatility strategies, it communicates a “third dimension” of risk mitigation with positive carry and could serve as a potential alternative to cash or short-term bonds. It also possesses interesting signaling qualities with regards to various risk assets. It has been available on Bloomberg (ticker: EABCDI) since 2019 and will be exclusively available through EAB from 12/1/2026 onwards.
*Bloomberg subscription required
LEGAL DISCLAIMER
All persons using the EAB Investment Group, LLC website (“Site”) expressly agree to the foregoing disclaimer as a pre-condition to using this Site for any purpose. The materials on the Site including, without limitation, news articles, informational materials and all other manager-specific information, have been prepared for informational purposes only and do not constitute financial, legal, tax or any other advice. All information contained herein is provided “as is” and EAB Investment Group, LLC expressly disclaims making any express or implied warranties with respect to the fitness of the information contained herein for any particular usage, its merchantability or its application or purpose. Prior to making any investment or hiring any investment manager you should consult with a professional financial advisor, legal and tax advisor to assist in due diligence as may be appropriate and determining the appropriateness of the risk associated with a particular investment. In no event shall EAB Investment Group, LLC be responsible or liable for the correctness of any such material or for any damage or lost opportunities resulting from use of this data.
TERMS OF USE
All expressions of opinion included on the EAB Investment Group website are subject to change without notice. This website is for informational purposes only and does not constitute a solicitation to buy or sell securities. Although information on this web site has been obtained from sources believed to be reliable, EAB Investment Group does not warrant its accuracy or completeness and accepts no liability for any direct or consequential losses arising from its use. All investments are not suitable for all investors. At a minimum, to qualify to invest in any of our hedge fund products you must be an Accredited Investor and Qualified Purchaser.
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