Question 1: What does quantitative analysis mean?
The quantitative analysis method is a quantitative analysis of risks prioritized through qualitative risk analysis.
Quantitative risk analysis generally follows qualitative risk analysis, although experienced risk managers sometimes perform quantitative analysis directly after risk identification.
Quantitative risk analysis should generally be performed again when determining the risk response plan to determine whether the total project risk has been reduced to a satisfactory level.
Trends reflected in repeated quantitative risk analyzes can indicate the need for increased or decreased risk management measures and are a basis for risk response planning and as an integral part of risk monitoring and control.
Question 2: Three levels of quantitative analysis What is quantitative investment?
In the past ten years, quantitative investment has become a hot topic and focus in the development of European and American capital markets. It has become a new method emerging in the international investment community with rapid development momentum.
Quantitative investment, fundamental analysis and technical analysis are known as the three mainstream methods.
Due to the stable performance of quantitative investment trading strategies, its market size and share continue to expand, and it is sought after by more and more investors internationally.
The fund with the highest return rate in the past 20 years is Medallion of Renaissance Technology Company, with its clients’ average annual return rate as high as 35%. In the past four years, the size of Goldman Sachs’ quantitative funds has doubled, exceeding US$100 billion.
It can be seen that quantitative investment has become an important tool for institutional investors.
Quantitative investment has very obvious value for fund companies/asset management companies: First, it is easy to increase the scale.
An effective quantitative model can be quickly replicated on multiple products, thereby quickly scaling up.
This is most clearly reflected in Barclays' Index Enhanced series of products.
By the end of 2011, Barclays Quantitative Fund's management scale exceeded US$1.6 trillion, surpassing Fidelity Fund and becoming the world's largest asset management company.
The second is to obtain absolute returns.
Use quantitative hedging methods to build products that have nothing to do with market ups and downs and earn market-neutral strategies, which are suitable for large institutional customers who pursue stable returns, such as insurance funds, bank financial management, etc.
The representative company of this product is BridgeWater, currently the world's largest hedge fund. Its flagship product Pure Alpha has earned more than 35 billion US dollars in the past five years.
The third is to eliminate inside information and rat warehouses.
Quantitative investment only uses public data, and through the operation of mathematical models, it unearths the information hidden behind the public data, thereby defeating the market, and methodologically eliminating the possibility of inside information.
The use of complex IT systems for programmed trading during the transaction process makes it impossible for rat positions to be possible.
As domestic financial market supervision becomes increasingly standardized, quantitative investment will inevitably become the main method of investment research.
Theoretical Basis of Quantitative Investment When it comes to the theoretical basis of quantitative investment, we must start with the market efficiency hypothesis. Technical analysis, fundamental analysis and quantitative analysis represent three different levels of efficient markets.
In an inefficient market, technical analysis is fully effective, which was well reflected in the first ten years of China's capital market; when the market enters a weakly efficient market, excess returns can be obtained by relying on fundamental analysis. In the ten years from 2000 to 2010,
The year basically belongs to this era; when the market entered the semi-strong efficient market, that is, starting from 2010, we can observe that most products based on fundamental analysis have been unable to obtain excess returns. At this time, the domestic market has entered the semi-strong efficient market.
Of course, when the market enters a strong efficient market, no method can beat the market. At that time, passive index investment can only be made.
The traditional efficient market hypothesis holds that in a semi-strong efficient market, excess returns can only be obtained by relying on non-profit information (insider information or private information).
But what we can know is that in addition to non-*** information, it is not just insider information and private information. There is another way to obtain non-*** information: using data mining methods to mine non-*** information from public data.
*** Interest rate is the method of quantitative investment.
This is why quantitative investment can flourish in mature markets such as the United States (which has basically entered a semi-strong efficient market state).
As the effectiveness of China's market improves, China has begun to enter the semi-strong efficient market stage, coupled with the increasingly stringent supervision of inside information by regulators, making this method more and more suitable for obtaining non-*** interest.
Difficult, therefore quantitative investment has become one of the best scientific theories and techniques for obtaining non-*** interest.
Many people ask: Is quantitative investment just a short-lived concept, or is it a scientific theory that can be effective in the long term? I think through the above analysis of the efficient market hypothesis, I have got a clear answer: quantitative investment is effective in the semi-strong form.
The best analysis theory in the market is almost the only feasible analysis theory.
Bright Prospects After 30 years of rapid development in China's economy, all walks of life have basically been finalized, leaving less and less room for young people to grow.