Long/Short Digital Assets Hedge Fund Boosts Its Strategy Evaluation with GenieAI’s P&L Breakdown

GenieAI implemented its advanced P&L analyzer for a prominent Long/Short Digital Assets Hedge Fund, catalyzing improved strategy evaluation and performance analysis.

This case study illustrates how GenieAI's sophisticated solutions can provide crypto asset managers with unparalleled insights into their trading activities, leading to more informed decision-making and improved performance.

Problem:

The hedge fund was struggling to accurately assess the performance of its various strategies across different trading venues. In particular, at any given time, the portfolio manager wanted to slice and dice cross-venue P&L to understand performance of long vs. short positions as well as the cumulative income from funding rates vs. trading activity and asset lending. The fund lacked a comprehensive tool that could provide granular insights into their P&L sources, making it challenging to identify areas of underperformance and take targeted corrective actions. This deficiency was hindering their ability to optimize their trading strategies and maximize returns.

Solution and Results:

GenieAI’s PMS/RMS leveraged its state-of-the-art trading activity analyzer to provide the hedge fund client with a granular breakdown of P&L and accurate, real-time, analysis of trading activity. GenieAI’s PMS/RMS accurately decomposed and aggregated P&L across multiple time periods and dimensions, including:

1. Long vs. short positions

2. Perpetual futures vs. spot trading

3. Funding rates vs. asset appreciation

4. Individual trader performance

5. Strategy-specific performance

6. Trading venue analysis

Results: GenieAI's P&L decomposition and trading activity analysis tool provided the hedge fund with unprecedented visibility into their P&L sources. The system delivered:

1. Granular P&L Attribution Reports: The system generated detailed daily breakdowns of profit and loss, providing clear visibility into performance across all key dimensions including position types, trading instruments, and individual strategies.

2. Dynamic Performance Analysis Interface: An interactive dashboard enabled real-time exploration and analysis of trading performance, allowing fund managers to respond swiftly to market changes and strategy outcomes.

3 Intuitive Data Visualization: Complex P&L data was transformed into easily interpretable visual formats, facilitating quick insights and decision-making.

4. Tailored Reporting Suite: The platform offered customizable report templates catering to various internal and external stakeholders' needs.

Benefits:

Enhanced Strategy Evaluation: The hedge fund gained a clear, data-driven understanding of which strategies were performing well and which were underperforming across various market conditions.

Improved Decision Making: With granular insights into P&L sources, the fund could make more informed decisions about allocating capital to various strategies.

Optimized Collateral Management: The ability to compare performance across long/short positions and perpetual futures vs. spot allowed the fund to optimize their collateral allocations, reducing the amount of capital locked as collateral for underperforming strategies.

Better Risk Management: By understanding the impact of funding rates and asset appreciation separately, the fund could improve its basis trading strategies.

Trader Performance Optimization: Individual trader performance analysis allowed for targeted allocation adjustments to maximize team performance.

Venue Optimization: The ability to analyze performance across different trading venues helped the fund gain better insights into their trading costs.

The GenieAI Advantage:

GenieAI offers top-tier technology designed to meet the specific needs of asset managers and hedge funds in the digital assets industry. Our solutions are fully managed and tailored to each client’s requirements, ensuring that they benefit from cutting-edge AI, Machine Learning and quantitative models. The collaborative and iterative development process ensures alignment with client goals, while our robust AI Stack provides the tools necessary to achieve superior risk-adjusted returns.

This case study underscores GenieAI’s capability to deliver advanced, customizable solutions that enhance decision-making and drive performance in complex financial markets.

We would welcome an opportunity to discuss how our solutions could be beneficial to your business. Please contact us here.

About GenieAI:

GenieAI is the premier AI-powered Portfolio and Risk Management System for digital assets, leading the industry towards smarter, data-driven decisions and automated workflows. The technology enables investors to anticipate market trends and navigate risks in ways that were once unimaginable—all while managing portfolios with unprecedented precision.

GenieAI helps leading fund managers to:

1. Enhance portfolio metrics

2. Predict market trends

3. Improve data-driven decisions

4. Automate analysis and reporting

5. Boost model performance

GenieAI's expert team of industry leaders brings unmatched AI and ML experience to investment management. GenieAI’s clients include some of the world’s most successful and well-respected digital asset funds.

GenieAI is backed by leading investors, including Coinbase Ventures, Bain Capital Ventures, Goodwater Capital, Sierra Ventures, Fasanara Digital, Arca, and other prominent firms.