Thomas Schneeweis says most hedge funds have lower risk than individual stocks or even stock indices as individual stocks have an annual volatility of about 30%. “The S&P500’s annual volatility is about 15%. Most hedge funds (with the exception of some long bias or global macro hedge funds) have an annual volatility below 15% and even commodity trading advisors (futures and option traders) have annual volatilities close to that of the S&P500,” he wrote in his book.
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