News

Trump vs Clinton: Election Scenario Analysis

Months after the UK’s vote to leave the EU (Brexit), prices in risk assets are still swaying from one Article 50 headline to the next. In the US, November 8 presents a similar risk management challenge to market participants because of the outcome of the long-awaited and heavily-contested US Presidential Election.

Not unlike Brexit, the market has once again predicted one outcome as more likely than the alternative, the question of how markets might react, and the subsequent resulting price changes if the unlikely prevails. Below, we present an example of estimates, as we did for Brexit, for either outcome of the vote:

Probability (approx.)0.80.2
Asset ClassClinton WinsTrump Wins
USDCHF2%-4%
US Bond Prices-1%2%
US Equities1%-3%
Gold-1%5%
Volatility-5%20%

Please contact Consulting or your Imagine representative for help with constructing your own scenario analysis.
Disclaimer

The stresses described in this blog post illustrate one possible scenario and are intended to be used in general as guidance towards risk management of market events.


David White
David White
About the Author

David White worked as an equity trader and portfolio manager in derivatives for more than five years before joining Imagine’s London office as a Consultant in 2015. David’s roles are to advise and offer consulting services for systematic applications of risk management and derivatives pricing. David leads and is the project manager for EMEA client implementations. David holds a bachelor’s degree from Bournemouth University. He can be reached by email and phone: +44 (0) 7440 0743.

Related News

CASE STUDY: ROBECO

A large, highly respected asset manager offering both fundamental and quantitative strategies.

July 20, 2021

Round Table Summary: Prime Brokerage, Margin, Collateral and Data

Offering valuable insight into the priorities and challenges facing prime brokers, broker dealers and clearers, this report is a summary of the discussion during the Margin, Collateral and Data Round Table, sponsored by Imagine Software on Thursday 25th March 2021.

April 29, 2021

Cloud Key to Minimizing Risk for Hedge Funds

Moving to remote working has created new headaches for hedge funds through the risk of a “single point of failure” in a portfolio manager’s tech setup, according to Lance Smith CEO and co-founder of Imagine Software.

April 27, 2021

Latest Tweet