Quantifying hedge funds:
Quantitative hedge fund is a fund that combines the concepts of quantification and hedging, mainly guides investment by means of statistical methods and mathematical models, and responds to changes in financial markets by managing and reducing the risks of portfolio system, so as to obtain relatively stable expected returns.
The goal of quantitative hedging program trading;
Stocks, bonds, futures, spot, options, etc.
Quantify the operation process of hedging products:
First, build a long portfolio of stocks through quantitative investment, then short stock index futures to hedge market risks, and finally obtain stable excess expected returns.
Specific methods of quantitative stock selection
The quantitative analyst establishes a model after formulating the rules, and first tests it with historical data to see if it can make money; If possible, inject a small amount of money and accumulate firm transactions outside the model. If there is a profit after the firm offer, expand the amount of funds to judge whether it has an impact on the investment results.
Advantages of quantitative hedging:
1, with wide investment scope and flexible investment strategy.
2, in pursuit of absolute expected return as the goal.
3. Better risk-adjusted expected return.
4. It has low correlation with major market indexes and has asset allocation value.
For example, Huatai Bairui is a quantitative hedge fund for stock index futures hedging, and its expected return is divided into three parts: the contribution of stock long portfolio to excess expected return; Expected return contribution of basis fluctuation of stock index futures: expected return contribution of net exposure.
Investment is risky, so be cautious when entering the market.