---
title: Hedge Funds & Monetary Policy
url: https://www.ml-quant.com/papers/ssrn/5115891/
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 5115891
source_url: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5115891
featured: 2025-02-05
citations: unknown
topic: Derivatives & Volatility
---


# Hedge Funds & Monetary Policy

Hedge funds that react more to monetary policy changes tend to have higher returns, likely because they use government announcements to forecast market futures.

- Source: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5115891
- Identifier: SSRN 5115891
- Released: 2025-02-03
- First featured: Quant Letter No. 84 (2025-02-05): https://www.ml-quant.com/issues/2025-02-05/
- Citations (Semantic Scholar): not tracked
- Published in: not yet
- Topic: Derivatives & Volatility

## Related

- [PolyModel for Hedge Funds' Portfolio Construction Using Machine Learning](https://www.ml-quant.com/papers/arxiv/2412.11019/): The use of machine learning and PolyModel feature selection in hedge fund investments improves returns and portfolio optimization, but also increases volatility, questioning the reliability of larger funds.
- [Compounding Effects in Leveraged ETFs: Beyond the Volatility Drag Paradigm](https://www.ml-quant.com/papers/arxiv/2504.20116/): The performance of leveraged ETFs is shown to depend on return autocorrelation and dynamics, with daily-rebalanced LETFs boosting returns in momentum-driven markets.
- [Hedge Fund Portfolio Construction Using PolyModel Theory and iTransformer](https://www.ml-quant.com/papers/arxiv/2408.03320/): The article explores the use of PolyModel theory and deep learning in creating hedge fund portfolios for high returns and low risks.
- [Federal Reserve Communication and the COVID-19 Pandemic](https://www.ml-quant.com/papers/doi/10-1111-manc-12520/): A study reveals that the Federal Reserve's response to the COVID-19 pandemic was more reactive, focusing on financial stability and market volatility.
- [Common Ownership and Hedge Fund Activism: An Unholy Alliance?](https://www.ml-quant.com/papers/ssrn/4835079/): The study suggests that common ownership can lead to anticompetitive outcomes, such as reduced wages and wealth transfer to shareholders.
- [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.