What is Quantitative Investing? What do you mean by quantification?

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Mathematical models: Mathematical formulas or models are required for calculations;

Computer technology: the use of computers to conduct automated trading;

Investment Strategy: Adopt this approach as a habitual investment strategy.

Learn about quantitative investing in one minute.

Quantitative investment is to reflect the investment philosophy and strategy into the specific model through the design of specific indicators and parameters, so that the model can track the market without any emotion.

Features: It has four characteristics: fast and efficient, objective and rational, balance between returns and risks, and balance between returns and risks.

Operation. 1. Valuation and stock selection.

Valuation: The valuation of listed companies is an important method of fundamental analysis of the company, under the basic logic of "value investment", the degree of distortion of the secondary market can be judged by the valuation of the company, and then find out the undervalued or overvalued **, as a reference for investment decisions.

2. Asset allocation.

Asset allocation refers to the selection of asset classes, the allocation of various types of assets in a portfolio, and the real-time management of these hybrid assets.

3. Investment strategies based on behavioral finance.

The application in the enterprise will mainly focus on quantitative stock selection, asset allocation, performance evaluation and risk management, behavioral finance, etc., and with the continuous increase in the proportion of institutional investors, including **, the increasing abundance of derivatives tools (stock index**, margin trading, etc.) and the progress of quantitative investment technology, the investment strategy of ** managers will become more and more complex, and programmatic trading (system) will also have rapid development.

What does quantitative investing mean

Quantitative investment refers to the use of computer technology with the help of modern statistics and mathematical methods.

The best way to trade. Quantitative investment can bring a variety of excess returns from the huge historical data"High probability" event to formulate strategies, verify and solidify these laws and strategies with quantitative models, and then strictly implement the solidified strategies to guide investment, in order to obtain sustainable, stable and above-average returns of excess returns.

Quantitative investment originated in the ** market in the seventies of the last century.

After that, it developed rapidly and became popular, especially in the ** trading market, and programmatic gradually became the mainstream. According to data, programmatic transactions in mature foreign markets have accounted for 70%-80% of the total trading volume, while domestic transactions have just started. Traders' mood swings and other drawbacks are increasingly becoming barriers to profitability, and the natural precision and 100% execution rate of programmatic trading bring advantages to its profitability.

Advantages of Quantitative Trading:

1.Strict discipline.

Quantitative trading has a strict discipline, and in doing so, it overcomes human weaknesses.

Cognitive biases can also be overcome by greed, fear, and luck.

Every decision we make is well-founded, especially when it comes to data. The system will show the growth and valuation of the ** selected ** compared to the others**.

comprehensive evaluation of the situation, capital, and trading timing.

2.Complete systematic.

A complete systematization is manifested at multiple levels, including in the allocation of large types of assets.

The core investment ideas of quantitative trading include macro cycle, market structure, valuation, growth, earnings quality, analyst profitability, market sentiment and other perspectives.

3.Make proper use of the idea of arbitrage.

Quantitative trading is looking for valuation depressions, and capturing the opportunities brought about by mispricing and misvaluation through comprehensive and systematic scanning. Qualitative investment spends most of its time pondering which company is a great company, and the **ticket can be doubled**. Unlike qualitative investing, quantitative investing spends most of its energy on analyzing** is a valuation depression.

4.Win by chance.

This is manifested in two aspects, one is to continuously dig out the historical laws that are expected to be repeated in the future and make use of them in quantitative investment. The second is to use probability analysis to improve the probability of successful trading in the actual operation process.

Investment is risky, and you need to be cautious when entering the market. This is the truth that every investor knows, however, the market is changing, and the judgment and decision-making of investment Huizhao people are often affected by emotions, cognition and experience. Therefore, how to establish a scientific investment strategy and reduce investment risks has become a concern for many investors.

So, what is quantitative investing?What are the advantages?How does quantitative trading software help investors achieve quantitative investment?

1. What does quantitative investment mean?

Quantitative investment, as the name suggests, is the use of mathematical and statistical methods to analyze and develop investment strategies to achieve a better return on investment. The core of quantitative investment is to use computer programs to process massive market data and dig out market rules and trends, so as to help investors formulate more scientific trading strategies. Compared with the traditional trading method, quantitative investment has higher efficiency and accuracy.

2. Advantages of quantitative investment.

Reduce investment risk: Quantitative investment avoids the interference of investors' emotions and subjectivity through scientific analysis and technology, and reduces investment risks.

Improve investment efficiency: Compared with traditional manual trading, quantitative investment can achieve automated trading, thereby improving investment efficiency and accuracy.

Optimize asset allocation: Quantitative investment can formulate the optimal asset allocation plan according to the market** and investors' risk appetite to improve the return on assets.

Diversification: Quantitative investing can be diversified through a variety of strategies and models to reduce portfolio risk.

3. Quantitative trading software.

Quantitative trading software is a key tool for achieving quantitative investment. Quantitative trading software helps investors achieve quantitative investment by providing data interfaces, strategy backtesting, automatic trading and other functions. At present, there are many types of quantitative trading software on the market, such as jellyfish quantification.

The core features of the quantitative trading software include:

Data interface: Quantitative trading software needs to provide real-time market data interfaces, including financial news, etc., for investors to analyze and make decisions. Strategy Backtest:

Quantitative trading software needs to provide a strategy backtesting function, that is, to test the effectiveness of trading strategies based on historical data.

Strategy backtesting: Quantitative trading software needs to provide a strategy backtesting function, that is, to test the effectiveness of trading strategies based on historical data.

Automated trading: Quantitative trading software needs to provide automated trading functions, that is, to achieve automated buying and selling operations according to preset trading strategies.

As a new type of investor, quantitative investment has higher efficiency and accuracy, which can help investors achieve scientific asset allocation and risk control. As a core tool to realize quantitative investment, quantitative trading software needs to provide functions such as data interface, strategy backtesting and automatic trading. Investors should choose the appropriate quantitative trading software according to their own investment needs and risk tolerance, and at the same time need to pay attention to scientific strategy formulation and risk control to achieve ideal investment results.

Quantization is to discretize the amplitude of the instantaneous value obtained by sampling, that is, to use a set of specified levels to express the instantaneous sampling value with the nearest level value.

Quantify. Hanyu Pinyin: liàng huà

English: quantisation quantizationThe "quantification" in daily life refers to the goal or task that has a clear body and can be clearly measured.

Depending on the situation, it can be expressed in terms of quantity, specific statistics, range measurement, length of time, etc. For example, four trillion expenditures, 9.6 million square kilometers, eight hours, and ...... to complete the task

Quantitative investment refers to the trading method of issuing trading orders through quantitative methods and computer programming for the purpose of obtaining stable returns.

With a history of more than 30 years of overseas development, its investment performance has been stable, and its market size and share have been expanding, and it has been recognized by more and more investors.

From the perspective of participants in the global market, according to the scale of assets under management, five of the top four and six asset management institutions in the world rely on computer technology to carry out investment decisions, and the scale of funds managed by quantitative and programmatic sequential exchanges is constantly expanding.

In fact, the development of the Internet has made the spread of new concepts around the world very fast, as a concept, quantitative investment is not new, and domestic investors have heard of it early.

Features: In fact, quantitative investment and traditional qualitative investment are essentially the same, both are based on the theoretical basis of market ineffectiveness or weak effectiveness, and investment managers can establish a portfolio that beats the market and generates excess returns through the analysis and research of fundamental aspects such as valuation and growth.

The difference is that qualitative investment management relies more on the research of listed companies, as well as the personal experience and subjective judgment of managers, while quantitative investment management is "the quantitative application of qualitative ideas", with more emphasis on data.

Quantitative investment refers to the trading method of issuing trading orders through quantitative and computer programming for the purpose of obtaining stable returns. With a history of more than 30 years in overseas development, its investment performance is stable, and its market size and share continue to expand, which has been recognized by more and more investors. According to the scale of assets under management, five of the top four and top six asset management institutions in the world rely on computer technology to make investment decisions, and the scale of funds managed by quantitative and programmatic exchanges is expanding.

In fact, the development of the Internet has made the spread of new concepts around the world very fast, as a concept, quantitative investment is not new, domestic investors have long heard of it. However, true quantification** is still relatively rare in China. At the same time, the development of machine learning has also contributed to quantitative investment.

The distinctive feature that distinguishes quantitative investment from qualitative investment is the model, and everyone is more concerned about the relationship between the model and people in quantitative investment. To illustrate this relationship for example, let's first take a look at the doctor's treatment of diseases, the diagnosis and treatment methods of Chinese medicine and Western medicine are different, Chinese medicine is looking, smelling, asking, cutting, and the final judgment of the result is largely based on the experience of Chinese medicine, and the qualitative degree is more omenous; Western medicine is different, first ask the patient to take a photo, laboratory tests, etc., which must rely on medical instruments, and finally draw conclusions and prescribe the right medicine.

There are some differences between qualitative investment and quantitative investment, these differences are like the differences between traditional Chinese medicine and Western medicine, qualitative investment is more like traditional Chinese medicine, relying more on experience and feeling to judge the disease; Quantitative investment is more like Western medicine, relying on model judgment, and the role of the model for quantitative investment managers is like the role of CT machines for doctors. Before each day's investment operation, I conduct a comprehensive examination and scan of the entire market with the model, and then make investment decisions based on the results of the inspection and scanning.

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Quantitative investing is an operating method or operating philosophy that sits alongside various other "non-quantitative" methods.

Quantification can also take investment models such as timing, trend following, overselling, strength and weakness hedging, etc.

The only difference is that quantitative investing will use quantitative ** and trends to make buy and sell point decisions, rather than the traditional chart form**.

Quantitative investment is a very broad concept, so to speak, as long as you are not simply patting your head, or listening to the news of the investment behavior can be called quantitative investment, is there no sense of loftiness in an instant? :) most commonly, you trade through the MACD indicator top divergence, bottom divergence, which is also a quantitative investment, because the MACD indicator is calculated by strict mathematical formulas.

Similarly, you select stocks based on financial indicators and build a portfolio that is also quantitative investment, because your decision-making is basically fundamental data; These are very "old-fashioned", so let's have something new, build a portfolio through a multi-factor model, and then use the program to calculate the risk and automatically adjust the position every day, and use algorithmic trading to complete the execution of the rebalancing action (such as buying 2 million shares at one time, you can't always go down with a single order), which is enough to "have a good reputation", and the premise is that you have to have a complex and perfect system support.

Quantitative investing is the application of mathematics, statistics, information technology and other knowledge in the investment process. Investors will collect the best data, and then rely on the powerful information processing power of the computer system to replace manual subjective judgment with advanced mathematical models, so as to achieve maximum returns under the premise of controlling risks.

Quantitative investing has many advantages, for example, investment strategies are based on large-scale data, execution is not affected by investor sentiment, cognitive biases can be effectively overcome, market changes can be fast-tracked, new statistical models are constantly searched for to provide excess returns, and new trading opportunities can be found. Quantitative investment, as a prerequisite for effective risk control, can be used as a tool for investment diversification. For example, quantitative investing can dig out certain patterns from historical data and use them.

These rules can result in a greater probability of return on investment.

In the process of quantitative trading, the application of quantitative investment thinking covers almost the entire process of investment, from the selection of investment objectives, the analysis of portfolio strategies, the implementation of strategies to investment objectives, and finally to the risk control and feedback of investment strategies. Several concepts related to optimal strategies, including trend strategies, quantitative hedging strategies, arbitrage strategies, high-frequency strategies, and algorithmic trading, are particularly worrying.

The reason for the popularity of quantitative investment, even with subjective investment trends, must have the advantages of quantitative investment. All in all, there are the following: it is based on mathematical statistics, closer to a science, making the future easier** and perceived, allowing all markets and transactions to be monitored in real time throughout the year, which humans cannot.

It avoids human emotion, is completely automated by machines, and strictly enforces discipline. Processes and risks are more controllable. These advantages have gradually brought quantitative investing into our field of vision and are being accepted by more and more investors.