Quantitative analysis can help us to measure risks and benefits more conveniently and intuitively, but it needs to be emphasized that Emanuel Derman, the top quantitative finance master on Wall Street in the United States and a famous professor at Columbia University, admitted in the article How to Deceive Wall Street by Mathematical Modeling.
It is impossible for us to invent a model that can predict how the stock price will change. If we believe that human behavior can completely obey mathematical laws, and thus confuse models with theories with many limitations, the result will definitely be a disaster.
brief introduction
Quantitative investment technology covers almost the whole process of investment, including quantitative stock selection, quantitative timing, stock index futures arbitrage, commodity futures arbitrage, statistical arbitrage, algorithmic trading, asset allocation, risk control and so on.
The quantitative analysis method will quantitatively analyze the risks whose priority is determined by qualitative risk analysis. Although experienced risk managers sometimes carry out quantitative analysis directly after risk identification, quantitative risk analysis is generally carried out after qualitative risk analysis. When determining the risk response plan, quantitative risk analysis should be carried out again to determine whether the total risk of the project has been reduced to a satisfactory level.