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The Smoothness of PLL Curves in Asset Management
The idea of a smoothness of PLL curves is really all about diverse education, portfolio construction and combining different approaches to markets. For instance, if you think about returns as being generated by certain factors, trend or momentum could be one factor,. value could be onefactor, carry could be another factor. Then you can combine investments or trades that express those different factors and that harvest returns from those factors in a smoother way than if you were trading one strategy in isolation.