Relative Value Arbitrage

Simultaneous purchase and sale of highly correlated securities with discrepancies in value – also known as “pairs” trading.

Merger Arbitrage

Investing in companies that are being acquired, but whose shares are trading at a discount to the acquisition price. Involves assessing both the likelihood of the transaction closing and the timeline to its completion.

Convertible Arbitrage

Simultaneous purchase and sale of convertible securities and common shares of the same issuer, respectively.

Capital Structure Arbitrage

Seeks to capitalize on mispricing across different security classes within a company’s capital structure. 

Caravel Capital Pie Chart Strategies