I saw someone asked the same question and I didn’t really understand the reply
Why do we say that the opportunities strategies that hedge funds employ generate the right tail skewness? I mean to me they are more of a left tail skewness especially because you take leverage and what if your belief about the market are totally wrong?
Are we assuming that under the global macro and managed futures, the hedge funds are very good at predicting which is why they can generate huge positive returns?
Greetings friend! I will defer to others with direct expertise in these strategies, but my understanding is that managed futures as a group tend to exhibit positive skewness, while global macro tends to be a wash, with equal positive and negative skewness - maybe slightly to the positive. Since opportunistic strategies comprise managed futures and global macro strategies, and they exhibit positive skewness (managed futures) or slightly positive skewness (global macro) - this is why people say opportunistic hedge fund strategies generate right tail skewness. For a more intelligent summary of different strategies and their skewness you can click here: https://www.ucc.ie/en/media/research/centreforinvestmentresearch/wp/wp1102assessing-performance-when-returns-are-skewed.pdf
Cheers - good luck - you got this