Hedge Funds

Subway debuts second stat arb


Subway Capital has just rolled out its second statistical arbitrage hedge fund. The Evergreen Fund IX uses a systems-based managed futures strategy and focuses specifically on behavioral finance. The firm has built proprietary systems based on its study of behavioral finance, with a philosophy that is grounded in the belief that emotions and cognitive errors influence investors' decision-making processes and over time can be anticipated and exploited for profit.

"Fear and greed are the things we are trying to understand," said Luther Ott, principal at Subway. "Behind every trade is a human being and they all have emotions. That