As of January 1, 2004, the legislator has established the necessary framework for Germany and enabled the use of hedge funds as a new form of investment. To gain a general understanding of the investment form of hedge funds, the term 'hedge fund', its historical development, and ways to differentiate it from traditional investment funds will first be introduced. Furthermore, the legal situation in Germany will be addressed. The various trading strategies will also be presented, categorized into five main groups. Each strategy will be explained in terms of its functioning. Additionally, various practice-relevant return and risk metrics, as well as risk and performance measures, will be described and explained. Three different statistical tests will also be outlined, which allow for conclusions about the distribution of a hedge fund's returns. Specifically, it will be explained how to test whether a normal distribution of returns exists. Another chapter will focus on the topic of copulas. Copulas can be used to analyze diversification properties. Initially, a definition of the copula function and an introduction to various copula families will be provided. Moreover, the log-likelihood estimation method for estimating copula functions will be described. The final chapter will give a brief outlook on other interesting questions in the field of hedge funds.