| Tracking
Error |
 |
A
divergence between the price behavior of a position or portfolio and
the price behavior of a benchmark. This means that the hedge was did
not work as effectively as intended and can create a profit or loss.
Usually expressed (ex ante) as an expected one
|
 |
Tracking
errors are reported as a "standard deviation percentage"
difference. They basically tell you the difference between what return
you got and the benchmark you were trying to copy. |
|
|
|
Dictionary
