from alpha to omega

Omega function

To evaluate a hedge fund as an investment prospect, in the continuing search for alpha or absolute return, past performance is rarely ignored. However uncertain one may be that the past will repeat itself, the returns posted by a fund or a manager, especially if these are available over a wide variety of market conditions, provide important information. The key questions are how to analyse this data to assess the risk/reward trade off and how much faith to put in the results. For pension funds a