Risk management’s perpetual-motion machine: Part 2, the magic elixir
[Continued from yesterday's Part 1.]
Yesterday’s post on the quest for a magic machine to quantify correlation among disparate individual risks took us, via a terrific Wired Magazine article [Hat tip: Matthew Healy], to the point of understanding that different risks correlate differently, and if we knew their correlation rates, we could design appropriate financial instruments [...]
