What is a neutral strategy, how does it affect TV production?

The strategy of investment by investor to attain profit whether the price increases or decreases is known as neutral strategy. The possibility of little risk is also avoided. This strategy is used when success or fall of a stock business is unknown. Different positions in stocks should be taken for short and long positions in order to take more benefit from the market. Good selections are chosen from the market to avoid risk. Good stocks are selected by taking short or long positions in stock market. Neutral strategy has equity and income is fixed despite of profit or loss. This strategy has ability to stay unaffected by the ups and downs of market value (BT Global Growth, 2018)

There are some markets which are able to stay unaffected by the position because their strategy is to return the same amount to the market. This is one of the many neutral strategies. There are industries which run on neutral strategies by have 50% short and 50% long participation in an industry. The long run and short run can vary from one and another. Overrated and underrated opportunities are taken advantage of by using neutral strategies. In neutral strategy focus is upon certain strategy, goal achievement is the main focus while zero beta versus is taken to escape the systematic risk. Calculated risks are taken.

Two main neutral strategies in market

There are 2 main neutral strategies.

Fundamental arbitrage

Statistical arbitrage

Fundamental arbitrage of neutral strategy

Instead of quantitative algorithm, fundamental analysis is used to do business by taking calculated risk. This helps company to move forward and risk is taken on basis of predictions

Statistical arbitrage of neutral strategy

This method uses historical data of stock purchase. Statistical arbitrage uses quantitative methods and algorithm to disclose prices and total expenditure. After calculating everything by using different methods such as quantitative method, the managers of the company place trade in stocks (Gupta & Paradkar, 2017)

Benefit of neutral strategy

Main focus is on creating portfolios to calculate market risk.

When market value is high neutral strategies turn out to be great benefactors but giving surprising results.

Short selling pure neutral strategies are great in market (Optionstrading.org, 2017)

AFFECT OF NEUTRAL STRATEGY ON TV PRODUCTION

Television is the electronic appliance which is found in everyone’s home. It is a source of entertainment and learning. Due to use of internet technology people watch shows and learn things on computers, laptops and on mobile phones. Usage of internet might have affected use of television but it is still purchased and is found in shops, homes, schools, hospitals etc. On TV, episodes of TV shows are aired, weekly but due to internet and Netflix people can watch entire show in one day. They do not have to wait for weeks or months to watch their favorite show. On the contrary, TV is the smartest source to watch sports like cricket, soccer, baseball; badminton etc. family fathers round the TV to watch matches.

People prefer watching sport on TV rather than on internet or mobile phone. So those who invest their money in TV business market are never in loss. They run business on the basis of neutral strategy. They know the risk by using quantitative methods. Due to application of neutral strategy the stockholders or investors remain unaffected with the position of market, unharmed.

References of Neutral strategy

BT Global Growth. (2018). Investment Strategies. Retrieved November 6, 2018, from https://btglobal.ca/blog/investment-strategies/market-neutral-investment-strategy/

Gupta, A., & Paradkar, M. (2017). Arbitrage Strategies: Understanding Working of Statistical Arbitrage. Retrieved November 6, 2018, from https://www.quantinsti.com/blog/statistical-arbitrage

Optionstrading.org. (2017). Neutral Market Trading Strategies. Retrieved November 6, 2018, from http://www.optionstrading.org/strategies/neutral-market/