Investor Glossary-zero-beta portfolioInvestor Glossary-zero-beta portfolioInvestor Glossary-zero-beta portfolioInvestor Glossary-zero-beta portfolioInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Zero-beta Portfolio

The HTML to link to this page
 

A portfolio of assets constructed to have no systemic risk is referred to as a zero-beta portfolio. Systematic risk measures a portfolio's sensitivity to market price movements. A zero-beta portfolio would have a risk profile similar to a risk-free asset. Changes in the value of a zero-beta portfolio are uncorrelated with the stock market. The beta of a zero-beta portfolio is determined by the weighted sum of the individual asset betas. In theory, a zero-beta portfolio could be constructed by including a variety of assets that move independently of each other. Hedge fund managers include a variety of alternative investment products such as futures contracts and real estate in their zero-beta portfolio models. The zero-beta portfolio minimizes systemic risk but not specific risk, which is the risk associated with specific assets.



Rate this zero-beta portfolio definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: irrevocable trust, minority interest, Zero Cost Collar, 144a, open position, EBITDA, 1035 exchange, annual return, FICO score, phantom income, in escrow, diluted share, deferred revenue, real GDP, deferred tax, current ratio, FTSE, 1031 exchange, dividends payable, margin rate, stock market close, limit order, VIX, retained earnings, per diem, debt service coverage, class C shares, stock split, average price per share, ex-dividend, command economy, ex-dividend date, reverse mortgage, liquidity ratio, option premium, risk management, quality assurance, 401a, required rate of return, cancelled check, implied volatility, covered put, LIBOR, Key Rate Duration, labor relations, wholly-owned subsidiary, APR, balance sheet, inflation


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Investor Glossary | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use