---
title: Volatility Targeting Is Trendy: Documenting the Trend Exposure Embedded in Volatility-Managed Strategies
url: https://www.ml-quant.com/papers/ssrn/4773781/
site: ML-Quant (https://www.ml-quant.com)
updated: 2026-09-26
license: Summaries CC BY 4.0; links go to the original sources
index: https://www.ml-quant.com/llms.txt
identifier: SSRN 4773781
source_url: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4773781
featured: 2024-03-27
citations: 0
topic: Derivatives & Volatility
---


# Volatility Targeting Is Trendy: Documenting the Trend Exposure Embedded in Volatility-Managed Strategies

The article examines the theory that the superior performance of volatility targeting strategies over basic buy-and-hold positions is due to trend following, and explores the link between volatility targeting and trend following.

- Source: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4773781
- Identifier: SSRN 4773781
- Released: 2024-03-26
- First featured: Quant Letter No. 42 (2024-03-27): https://www.ml-quant.com/issues/2024-03-27/
- Citations (Semantic Scholar): 0
- Published in: not yet
- Topic: Derivatives & Volatility

## Related

- [Risk Revisited](https://www.ml-quant.com/papers/ssrn/4825844/): The study identifies recency, cluster, and sign as three factors shaping investors' risk perceptions of a stock, influencing trading volume and future volatility.
- [Rough Volatility: Fact or Artefact?](https://www.ml-quant.com/papers/arxiv/2203.13820/): Fact or Artifact: The study proposes a new method to estimate the roughness of financial asset volatility, attributing observed roughness to microstructure noise.
- [On the Hull-White model with volatility smile for Valuation Adjustments](https://www.ml-quant.com/papers/arxiv/2403.14841/): The rHW model has been introduced to enhance Valuation Adjustments calculations by capturing market-implied skew and smile, significantly impacting interest rate derivatives' exposures and xVAs.
- [Short-Selling Hedge Funds](https://www.ml-quant.com/papers/ssrn/4764190/): Hedge funds involved in short-selling show superior performance and unique trading patterns, often trading against retail trading trends, contributing to their exceptional performance.
- [Risk premium and rough volatility](https://www.ml-quant.com/papers/arxiv/2403.11897/): The paper examines the effect of unpredictable risk on pricing in a rough volatility model, emphasizing the random nature of the market price of volatility risk.
- [Composite likelihood estimation of stationary Gaussian processes with a view toward stochastic volatility](https://www.ml-quant.com/papers/arxiv/2403.12653/): The first article discusses a framework for understanding parametric continuous-time stationary Gaussian processes, applied successfully to models describing the random log-spot variance of financial asset returns, including cryptocurrency.