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ucha
on Jan 28, 2015
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Yahoo to Spin Off Its Stake in Alibaba
You could hedge that risk by shorting the BABA stock at the same time you own YHOO. That way, you have no exposure to BABA.
encoderer
on Jan 28, 2015
[–]
Even if you're careful to short the same notional value, that's not a pairs trade that I would put on. It would open me to upside risk in BABA if YHOO does not perform as well. Correlations change all the time.
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