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What Sovereign CDS Spreads Potentially Tell Us about Currency Risk

Currency risk is embedded within CDS prices; if a country defaults, the value of its currency is likely to drop, to the detriment of investors with CDS exposure to that currency. The recently widening gap between European sovereign CDS priced in EUR and those priced in USD may therefore herald rising distress for the European Union as a whole.

WSJ Op-Ed by David Siegel: Investing and the Scientific Method

Writing in the Wall Street Journal, Two Sigma co-founder David Siegel argues that embracing the scientific method in investment management brings much-needed rigor to the process, while helping to counteract common but harmful biases.

What to Make of a Low-Volatility, Low-Correlation Market

Investors seem to expect benign market conditions to continue, but they should remain aware of the historical tendency for rapid, positive shifts in volatility measures to occur.