{"id":32199,"date":"2006-07-21T21:50:22","date_gmt":"2006-07-22T01:50:22","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=32"},"modified":"2006-07-21T21:50:22","modified_gmt":"2006-07-22T01:50:22","slug":"what-about-risk-control","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=32199","title":{"rendered":"What about risk control?"},"content":{"rendered":"<p>Prefblog reader <strong>Drew<\/strong> asks on the <a href=\"#comment-7\" \/><a title=\"Permanent Link: Comments and Requests: HIMIPref\" href=\"http:\/\/www.prefblog.com\/?p=25\" rel=\"bookmark\">Comments and Requests: HIMIPref<\/a> thread:<\/p>\n<blockquote><p>My impression is that HIMIPref does not merely select the most attractive issues for purchase but rather factors in the relative risks between different categories of preferred shares &#8211; chiefly retractible versus perpetual &#8211; with a view to constructing a safer portfolio than if the focus was placed solely on the most attractive issues. Is my impression correct?<\/p><\/blockquote>\n<p>This impression is essentially correct. A lot of thought has gone into the risk control aspects of <a href=\"http:\/\/www.prefshares.com\">HIMIPref<\/a>, although the exercise of these controls is much more explicit when optimizing according to the <a href=\"http:\/\/www.prefshares.com\/glossary.html#portfolioMethod\">portfolio method<\/a> than with the <a href=\"http:\/\/www.prefshares.com\/glossary.html#issueMethod\">issue method<\/a>.<\/p>\n<p>\u00a0With the parameterization currently supplied with HIMIPref for the issue method, a great deal of emphasis is placed on the potential for trading profits and the value of each issue relative to its price given all its <a href=\"http:\/\/www.prefshares.com\/glossary.html#riskAttributes\">risk attributes<\/a>. Thus, the primary comparison for a split-share, for example, is other split shares; comparisons to perpetuals have a great influence, but are less important.\u00a0It is unlikely that any class of shares could have so many issues far above\u00a0the curve that they totally dominate other classes &#8230; after all, if there were too many issues like this, then the curve itself would move!<\/p>\n<p>Thus, a certain amount of diversification of risk-attributes is built into the trading model. Should the subscriber wish it, this diversification can be amplified or reduced, by fiddling with the <a href=\"http:\/\/www.prefshares.com\/glossary.html#constraintSpecificationRecord\">constraintSpecificationRecord<\/a>\u00a0that resides on the client-side.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Prefblog reader Drew asks on the Comments and Requests: HIMIPref thread: My impression is that HIMIPref does not merely select the most attractive issues for purchase but rather factors in the relative risks between different &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"class_list":["post-32199","post","type-post","status-publish","format-standard","hentry","category-himipref-news"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/32199","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=32199"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/32199\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=32199"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=32199"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=32199"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}