Alpha transport with derivatives

dDerivatives can be used to transport the alpha from a manager's selection of securities to virtually any desired asset class benchmark. The authors d emonstrate that, by liberating the security selection return from the asset class return, alpha transport allows investors to find the best opportunit ies in both asset allocation and security selection. They also show how lon g-short portfolio construction can further enhance return by allowing manag ers to pursue the best investments in both "winning" and "losing" securitie s.