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Hedge funds are too powerful

In a blow to the Reddit crowd taking on Hedge Funds Wall Street elite, the broader hedge fund industry lives to fight another day for now following a week of Hevge drama. Even after the worst-ever short squeeze forced professional speculators to deleverage by the most in more than a decade, the smart money is staying invested in the Hedge Funds. Stocks beloved by professional speculators are rebounding, while their most-shorted shares are no longer staging a costly rally. Quant funds — often accused of amplifying sell-offs — have been largely unscathed.

Equity volatility is down again and other asset classes barely registered the commotion. The bottom line? Beyond the handful of smaller stocks roiled by the Reddit crowd, selling pressure has dissipated. Hedge funds overall dropped just 0. Deleveraging appears to be over now, he added. Risk parity typically reduces exposure when volatility rises, while CTAs follow strong trends both up or down. Much of this is down to the idiosyncratic nature of the Reddit investment phenomenon, which is the key Hedge Funds between this deleveraging episode Hedge Funds others spurred by economic anxieties or macro shocks such as the pandemic.

While the retail crowd can whip up a trading frenzy in a few stocks through its message board, the targets tend to be concentrated and relatively small. Over the past five days, trading volumes trebled for 59 members of the Russell Index compared Hedge Funds their six-month average.

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Over the past 10 days, volatility doubled for 46 members compared to the one-year average. Hedgw 2, posted smaller swings. Yet the Robinhood crew clearly made a big dent among a specific breed of smart money investor. Most fund Hedge Funds may see good reason to avoid making an enemy out of the new horde of day traders.

It’s the hedge funds that are irresponsible

For the more opportunistic stock pickers, there may be room to pick up some hedge-fund darlings that have only dropped because of technical selling pressure, according to Goldman Sachs strategists. With stock correlations falling near the lowest since Septemberthis might even be a better time for the pros to prove their skill, especially as a recovering economy supports stocks.

Hedge Funds

And it does not mean we are entering a new age where Hedge Funds power of Wall Street will be truly challenged. Global stocks also fell the most since late October after day traders hatching stock bets roiled hedge funds.]