Activist Short Sellers Generate 12.5 Percent Alpha

A new study shows that activist short sellers, a collection of hedge funds and more private research groups, returned 12.5 percent of alpha in the past year and a half.

Measuring alpha contribution through activist short sellers

An investing model that follows Activist Shorts Research created a simple strategy to replicate the public trades of following the top 28 activist shorts to measure the alpha contribution. This is significant, particularly as many traditional hedge funds lose on the short end of their relative value trades.  The long bias in these funds, typically near 80%, has been the primary alpha contributor while the short side has typically been a...