Quant Trading 101 Nitish Maini - Amazon Web Servicescom.estimize.public.s3.amazonaws.com/l2q... · Nitish Maini October 11, 2017 General Manager, Virtual Research Center Vice President,
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General Manager, Virtual Research Center Vice President, Portfolio Manager & Analyst, Office of the CEO, at WorldQuant
This presentation is for general information and educational purposes only and is not necessarily indicative of WorldQuant’s business practices, policies and/or procedures.
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1 QUANT VS. DISCRETIONARY TRADERS 2 WORLD OF QUANTS 3 WORLD OF ALPHAS 4 ALPHA DIVERSIFICATION PLAN: TAP 5 LINEAR REGRESSION ALPHA DEMO 6 CHECKLIST & VISUALIZATION 7 PROGRAMMING LANGUAGES
CONTENTS
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1. QUANT VS. DISCRETIONARY TRADERS
is an approach that seeks to choose investments based on human decision-making & develops over time.
is a rule-based strategy that utilizes computer models to identify investments and to execute most of the trades.
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Discretionary Trading Quantitative Trading
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2. WORLD OF QUANTS
• Back-testing: By testing against historical data, Quants can set leverage based on the worst drawdown a given strategy has endured.
• Diversification: Quants identify, trade and monitor multiple strategies across many markets for a large number of instruments.
• Data: Quants can take advantage of the Big Data revolution.
• Efficient: Because of the minimal human involvement required, burnout and execution mistakes can be reduced for Quants.
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2. WORLD OF QUANTS
Capital Growth
Volumes Traded
In the past five years, quant strategies gained about 5.1% a year, while the average hedge fund rose 4.3%.
Quant strategies account for more than 30% ($932 billion) of all hedge fund assets, up from 25% ($408 billion) in 2009.
Source: WSJ, HFR Inc. & Tabb Group
Quants have nearly doubled their share of stock trades from 14% in 2013 to 27% today.