![]() With the proliferation of more and more data than ever before, a strong argument in favor of systematic funds is that humans cannot possibly digest all of the relevant information available to them as efficiently as computers. But today’s quantitative investing is a bit different from the typical consumer product or website glitch it is honed with large troves of historical data mixed with high-powered computing as well engineering/mathematical expertise from some of the brightest minds assembled under the same roofs. Quant strategies that heavily rely on computer technology for investment decisions might sound foreign or even scary to certain investors, especially to those who have any apprehensions regarding the idea of technology controlling their money. While thoughts of fast-paced trading floors with multiple monitors displaying complex charts may enter one’s mind with regard to hedge funds, quantitative analysis can actually provide a calmer, more systematic approach that removes emotions from the investment process. However, the emergence of natural language processing techniques is gradually enabling machines to dive deeper than ever before. Quant funds can also utilize fundamental data but rarely dive as deep into a company as a human conducting fundamental research. Quant funds, on the other hand, remove the human element and rely on mathematical and statistical modeling. ![]() ![]() Quant hedge funds differ from discretionary hedge funds, which generally base their investment strategies on deep fundamental research and human judgment.
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