An opportunistic strategy changes from strategy to strategy as opportunities arise to profit from events such as IPOs, earnings disappointment, hostile bids, and other event-driven opportunities. It is not unusual for a manager to employ several strategies simultaneously. . Quantitative Arbitrage Quantitative arbitrage involves study of the behaviour of securities of different companies, often in the same industry. Fundamental and statistical analysis are the two most common tools used in this attempt to identify undervalued and overvalued securities to enhance portfolio performance. . Risk Arbitrage Risk arbitrage consists of investing in securities of companies that are the subject of takeover bids, leveraged buyouts, restructuring and other reorganizations where there is a perceived difference between the current market price of the target company's securities and the expected value to be realized upon the completion of the transaction.
Risk arbitrage is largely independent of overall market movement. .
Sector Funds Sector funds specialize in specific sectors of the economy such as technology, natural resources or finance. . Sharpe Ratio Please click here for information on the Sharpe Ratio . Short Selling Short selling is the sale of borrowed securities considered overvalued in the anticipation of purchasing them later for a lower price. The optimal strategy here is to sell high, buy low. Short selling can be used as a hedging technique or for speculation. .