Eighth Wave Pairs Strategy Hedge Fund


Our proprietary A. I. algorithm quantitatively screens thousands of stocks each trading day then selects …

Specific stocks that possess a high probability of experiencing short-term volatility. By focusing on these stocks, Wave 8 Capital capitalizes on market movements to generate profits. One unique aspect of our algorithm is its ability to identify stocks with inverse relationships or “non-correlation.” This means that when one stock’s value increases, the other stock in the pair tends to decrease. By pairing these stocks strategically, Wave 8 Capital is able to create beta-balanced and self-hedging investments.
This approach ensures that the potential risks associated with market fluctuations are mitigated to a certain extent. To implement this strategy, Wave 8 Capital selects one side of the stock pair to go long, meaning they expect its value to increase, while simultaneously going short on the other side, anticipating its value to decrease. This dual approach allows for the simultaneous capturing of gains on the long side and profiting from the decline on the short side.
Wave 8 Capital’s algorithm is particularly adept at identifying highly volatile stocks. In fact, the more volatile the stock, the better, as the strategy focuses on quick and modest profits. By conducting short trade cycles that typically range from 5 to 7 days, Wave 8 Capital aims to efficiently capture gains and manage risk.