What is the relationship between quantitative and traditional investing?

1) Not the antithesis of fundamental analysis.

Many investors still have a misunderstanding about quantification, believing that this kind of relying on quantitative models as the basis for investment operations, then the role played by managers, including the investment team, is not large. In fact, when there is a turning point or a small probability event in the market, the computer cannot replace the judgment of the ** manager, and in addition, in a volatile non-unilateral market environment, the response of the quantitative model to the new data is not entirely satisfactory. Therefore, in the operation of quantitative **, experienced managers and investment teams are still needed to grasp some more macro and big trends, and the role of computer models is to greatly reduce the workload of **managers under the normal market conditions, as well as to avoid mistakes caused by human emotions.

2) Not mysticism.

Quantitative investing is not mysticism, let alone an invincible secret. Quantitative investing is not about making money forever with one investment model, and it is not about using one model to solve all problems, and not one model that can be competent for any market situation. The quantitative investment model is only a tool, and the success of quantitative investment depends on whether the investors who use this quantitative tool really grasp the essence of quantitative investment.

We need to establish a lot of quantitative models, such as stock selection model, industry allocation model, timing model, trading model, risk management model, asset allocation model, arbitrage model, hedging model, etc. The quantitative investment model is just a tool, a method, and a means to achieve a mature and effective investment philosophy, and constantly revis, improve and optimize it according to the changes in the investment philosophy and market conditions.

3) Capture high probability.

In order to obtain better returns from a high probability, the quantitative investment model needs to focus on the estimation and identification of the future return of the asset, and mainly includes the accuracy of the estimation of the view of ** and the view of the industry. The view of the future return of an asset can be either absolute or relative (or alpha). For the common **, the estimation and ** of the latter i.e. alpha may be more demanding, and the quantitative model is mainly looking for the best alpha model.

Quantitative investment needs to comprehensively consider the identification of assets (** selection, industry allocation, asset allocation, etc.), trading (including timing) and risk control (including the balance of risk and return) and other factors, to find the portfolio with the greatest probability of success and maximize returns.

What is the relationship between quantitative investing and traditional investing? Quantitative investing is not mysticism, let alone an invincible secret. Quantitative investing is not something that can be earned forever by relying on an investment model.

money, and it's not that one model can solve everything, and not that one model can do any market situation. The quantitative investment model is just a tool, and the success of quantitative investment lies in the use of this quantitative chemistry.

Whether investors have truly grasped the essence of quantitative investing. At present, it is better to do quantitative investment in China is the micro network, and the landlord can learn more about it.

What is Quantitative Investing?

Quantitative investment refers to the trading method of obtaining stable income through quantitative methods to clear blue raids and computer programs to send out trading orders, the development of quantitative investment has a history of more than 30 years overseas, because its investment performance is relatively stable, market share and scale are also expanding, and has been recognized by more and more investors.

What is the core philosophy of quantitative investing?

In terms of investment purposes, both quantitative investment and active investment are aimed at obtaining excess returns in the market, and the core of quantitative investment is to obtain long-term and stable excess returns by balancing returns, risks and investment costs.

Quantification itself is based on data, we analyze the data at different latitudes, and transmit the investment ideas of investment managers and some opportunities to make money to the computer through the human brain, and finally realize the portfolio through programming.

Quantitative investment is not only based on data, mining investment information and models from data, but also combining with fundamentals to find long-term sustainable returns**.

From the perspective of stock selection, stock selection in quantitative investing is not the same as active stock selection. Active stock selection is carried out by different researchers to cover the fields or industries they are familiar with. Quantitative stock selection is more about mining the characteristics of each vote through factors, how to understand it?

Let's take an example, if you have a physical examination in the hospital, the doctor will take you to different departments, use different instruments to give you different examinations, and take different diagnostic reports to evaluate your physical condition.

The process of quantitative stock selection is also similar, judging ** from different latitudes such as value, profitability, growth, valuation, etc., scoring **, and judging the quality of a vote.

In the process of quantitative investment, it is necessary to adhere to the discipline and systematization of quantitative investment, and ensure the efficient conversion of quantitative investment by adopting systematic investment methods and disciplined transactions, so as to obtain long-term and stable excess returns.

At the same time, quantification can be very accurate to characterize and measure the risk and return, and create products with different risk-return characteristics.

To put it simply, quantitative investment is an investment method with data model as the core, programmatic trading as the means, and the pursuit of absolute return as the goal. Its essence is to realize the trading idea through programmatic trading.

The strength of quantitative investing lies in its discipline, systematization, timeliness, accuracy, and decentralization.

1.Discipline: Strictly implement strategic thinking, overcome the weaknesses of human nature: greed, fear, etc., and overcome the consequences of always feeling good about yourself: chasing up and down.

3.Timeliness: Fast-track market changes, comprehensively scan market information, and constantly discover new statistical models that can provide excess returns, and look for new trading opportunities.

4.Accuracy: Accurately and objectively evaluate trading opportunities, overcome subjective sentiment biases, and capture opportunities brought about by mispricing and misvaluation through comprehensive and systematic scanning.

5.Decentralization: Winning by probability.

There are two main aspects, one is that quantitative investment constantly excavates historical laws from history that are expected to be repeated in the future and makes use of them, and these historical laws are strategies with a high probability of winning. The second is to rely on screening out the best combination to win, rather than one or a few ** votes to win, from the perspective of the portfolio concept is also to capture the high probability of winning, rather than betting on a single ** ticket.

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 Investment. It refers to a transaction that issues trading orders through quantitative methods and computer programming for the purpose of obtaining stable income. Quantitative investment, fundamental analysis, and technical analysis are known as the three mainstream methods.

Unlike traditional investment methods, there are two main types of investment methods: fundamental analysis and technical analysis, but quantitative investment mainly relies on data and models to find investment targets and investment strategies.

Advantages of Quantitative Investing:

1. It is based on mathematical statistics, which is closer to a science, making the future easy to perceive.

2. It can monitor and trade all markets in real time all year round, but humans cannot.

3. It avoids human emotion and is completely automated by the machine.

4. Strictly enforce discipline. The process and risk are more controllable.

What exactly is quantification?

To use a popular analogy: ordinary people**or** is like seeing a doctor in traditional Chinese medicine, through looking, smelling, asking, cutting, and finally judging the results, to a large extent, based on the experience of traditional Chinese medicine, the qualitative degree is larger, and it is largely operated by relying on experience and feeling judgment; Quantitative trading is like Western medicine, first ask the patient to shoot, test, etc., these must rely on medical instruments, and finally draw conclusions, prescribe the right medicine, quantitative like relying on model judgment, the role of the model in quantitative investment is like the role of CT machine for the big doctor.

The model checks and scans the entire market, and if it meets the program model you have written, it will deal with the pirate (placing orders and the like, you can set your own touch and hold vertically, depending on how your model is written). When "quantification" meets "program" to understand "quantization", programmatic trading is easy to understand, that is, quantitative trading strategies are executed through computer programming to carry out automatic or semi-automatic order trading.

It is not realistic for individual investors to invest directly in quantification. However, its ideas are worth learning from, such as enhancing objectivity and discipline in investment decision-making. In addition, investors can also make quantitative investments indirectly.

After the Everbright "Oolong Finger" incident, terms such as quantitative investment and high-frequency trading spread rapidly, arousing the interest of many investors.

In fact, quantitative investment has been developed overseas for more than 30 years, and it is not new in China. However, in the past two or three years, due to the continued downturn in the A** field, this investment method has become popular. The so-called quantitative investment is simply the use of quantitative investment methods such as mathematics, statistics, and information technology to manage investment portfolios.

This concept corresponds to qualitative investing that the market is familiar with, but the two are very different in terms of investment ideas. Qualitative investment is mainly based on the company's fundamental research to make investment decisions, focusing on depth. Quantitative investment, on the other hand, focuses on breadth, collects data, processes data, finds out the common characteristics of investment opportunities, and establishes a model to invest.

The advantage of the quantitative investment system is that the investment decision-making process avoids subjective assumptions and emotional influences, and can discover complex data patterns and quickly seize trading opportunities. In addition, the transaction speed of quantitative investment is fast, and the operational efficiency is greatly improved. For institutions, quantitative investing has reduced the reliance on popular traders to a certain extent.

However, there are also significant shortcomings, such as the inability to complete the expected investment activities in the event of a system failure, and the inability to make flexible adjustments like a human being.

High-frequency trading is an important method of quantitative investing. While "high-frequency trading" can increase liquidity in the market, it can have a catastrophic impact on the market if a program error or human negligence occurs. Although the impact of this error has been limited so far, it has caused wild market volatility on several occasions.

The Everbright incident also fully revealed the risks of high-frequency trading, and posed challenges for strengthening risk prevention and control and supervision.

For individual investors, it is not realistic to invest directly in quants. However, some of these ideas are worth learning, such as enhancing objectivity and discipline in investment decisions. In addition, investors can also indirectly invest in quantitative wealth management products by purchasing quantitative wealth management products.

According to financial experts, there is not much difference between choosing a quantitative product and choosing an ordinary ** product. First of all, investors need to understand the past performance of quantitative products, and if the performance of the product continues to be good for a period of time, it means that this model is relatively reliable. Secondly, it is to see whether the investment philosophy and thinking methods of the first manager are recognized.

Quantitative investment is to use modern statistical and mathematical methods to find a variety of "high probability" strategies that can bring excess returns from massive historical data, and to guide investment in strict discipline according to the quantitative models constructed by these strategies, and strive to achieve stable, sustainable and above-average excess returns. Quantitative investment belongs to the category of active investment, which is essentially the quantitative practice of qualitative investment, and the theoretical basis is the ineffectiveness or weak effectiveness of the market.

Quantitative investment features:

First, the investment perspective is broader. With the help of computers, we can efficiently and accurately process massive amounts of information to find a wider range of investment opportunities across the market.

Second, investment discipline is stronger. Strictly implement the investment advice given by the quantitative investment model to overcome the weaknesses of human nature.

Third, it is highly dependent on historical data.