What is a quantitative hedge fund?
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 expected annualized expected 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.
Advantages of quantitative hedging strategy of absolute expected annualized expected return;
Quantify the risk of hedging products:
The biggest risk is that the stock portfolio built by fund managers has not outperformed the market and has not created the expected annualized income. Therefore, under the short-selling mechanism, short-selling and short-selling are mostly negative, resulting in losses. For example, 20 14 and 12, the blue-chip stocks represented by CSI 300 soared, which made many hedge stock portfolios lag behind the CSI 300 index and eventually led to a retreat. In this extreme case, the response is:
First, insist on holding and wait for the market to return to equilibrium. After all, quantitative hedging strategies are generally long-term effective.
Second, at this time, there will be a big deviation between futures and spot prices, and basis arbitrage is promising, and it can still make profits or reduce losses.
Third, there are already 300, 500, 50 options and so on. In the future, there will be more and more short-selling tools and more strategies for investment managers to choose, so there will be more and more ways to smooth fluctuations.