With the inception and success of its Commodity Long-Short Program, Red Rock Capital is demonstrating the value of working smarter and harder. In 2013, Red Rock Capital’s managing partner and Chief Investment Officer Tom Rollinger teamed up with famed hedge fund manager Edward Thorp to develop a system that capitalizes on the inefficiencies of physical commodity markets and this program’s yield is turning a lot of heads.
Red Rock Capital is a 10-year-old, Chicago-based commodities investment management firm. This award-winning company’s Commodity Long-Short Program involves more than you can see with the naked eye. An article recently published by Futures Magazine describes the Commodity Long-Short Program as a proprietary quantitative pattern recognition strategy that was created in order to measure long or short directional “volatility bursts” in physical commodity futures.
The program looks at a heavily diversified portfolio of 20 liquid exchange-traded United States commodity features, including the agricultural, metals, livestock, softs, and energy sectors. Rollinger states that this program focuses on physical commodities without financial futures because they are more susceptible to supply and demand swings than financials, and it boasts an average trade holding period of eight days.
The numbers don’t lie that the Red Rock Capital system is yielding fantastic results. Since the launch of the Commodity Long-Short Program in September 2013, it went up by nearly 20 percent through April 2014 and upwards of 12 percent year-to-date. Annualized returns have topped 29 percent during a time when systematic trends have been leading many astray. Now that Red Rock Capital has produced 0.18 daily correlations to diversified CTAs, 0.19 trend-following CTAs, and 0.13 short-term CTAs, the firm is garnering the attention of allocators and family offices - once again broadening and diversifying its customer base.
Posted By Svetlana Binshtok