The Exigo Fund looks to access a combination of Arbitrage Strategies in order to provide profitable and low volatility returns to investors. The two strategies currently being employed by the fund are:
- Deterministic Arbitrage
- Statistical Arbitrage
Exigo’s Fund Manager has developed a high speed computer system that follows ‘pairs’ in order to identify widening price discrepancies, this is known as Deterministic Arbitrage and a pair is defined as the same market instrument traded on two different exchanges. Once an arbitrage opportunity has been identified, the system automatically executes the trades on both markets to crystalise the profit. The Fund’s computers operate at ultra-high speed via strategically placed servers and continue to sequentially place a large number of small trades (to both buy and sell the instrument on the relevant exchanges) until the price discrepancy has narrowed to the point where it is no longer profitable.
In the case of the Statistical Arbitrage trading strategy positions are identified where a divergence occurs between a correlated pair of stocks, an example could be Shell and Exxon. These positions are identified by both fundamental and statistical analysis. The fund will take out a long position on the stock deemed to be undervalued and a short position on the other stock. These positions will be held until divergence occurs.
The Exigo Global Arbitrage Fund investment strategy is:
- Profitable in both up and downward moving markets
- Not correlated to capital markets
For further information regarding the two arbitrage strategies please consult the Exigo Brochure.