Quantitative hedging is a combination of the concepts of quantification and hedging. "Quantification" refers to the use of statistical methods and mathematical models to guide investment, and its essence is the quantitative practice of qualitative investment. "Hedging" refers to managing and reducing the risk of the portfolio system in order to cope with the changes in the financial market and obtain relatively stable returns. In practice, hedge funds often use quantitative investment methods, and they are often used alternately, but quantitative funds are not exactly the same as hedge funds.

In recent years, with the continuous expansion of the securities market, financial derivatives are constantly introduced, investment strategies and profit models have undergone fundamental changes, and the complexity of investment has increased, resulting in corresponding changes in the proportion of investors in the securities market. The proportion of professional investment managers is increasing, and it is accelerating. On the other hand, quantitative hedging investment strategy will become one of the main investment directions of institutional investors because of its low risk and stable income.