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There is no doubt that quantitative investment strategies are more difficult to understand and may often become frustrating. It is somewhat reserved for serious investors who are willing to put time and energy into not only understanding the strategy but also employing it in their investment plans.
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An Investment Strategy for Serious Investors- The James Velissaris Way
There is no doubt that quantitative investment strategies are more difficult to understand and may often become frustrating. It is somewhat reserved for serious investors who are willing to put time and energy into not only understanding the strategy but also employing it in their investment plans. With the development of advanced computing methods, enormous data points can be run in a matter of few minutes by those who are intellectually curious. This means that data points from many years back can be assessed in order to establish a pattern. Investors and traders who are passionate about this are able to find directional patterns which are unique in nature through various data sets.
Quantitative Investment Theory and the James Velissaris Strategy James Velissaris, who has been trained in Harvard, invests in a rigorous portfolio that is composed of currencies, rates, commodities, and credits in order to identify asymmetric opportunities in investment from assets in global classes. One of the most exciting strategies that are employed by the likes of James Velissaris takes into account all the opportunities that are possible to dynamically allocate through short volatility, long volatility as well as vega neutral strategies. Quantitative investment theory dictates that having a balanced as well as a diversified portfolio is essential.
It helps to construct uncorrelated absolute returns while simultaneously maintaining a positive symmetry along the right and left tails over time. Those who subscribe to this theory are mindful about making sure that the left tail is protected when the market conditions become stressful. It is undoubtedly more challenging to protect your assets or even grow them when the market becomes volatile and uncertain. For this, believers of this strategy take into account the depth of private equity as well as a host of quantitative research methods to incorporate various forecasting models using fundamental analysis.
It is also important to take into account the risk of using the dynamic rebalancing approach of two different strategies that need to be addressed almost constantly with developing market conditions. There are various established firms in the market like Two Sigma, Renaissance Technologies, and more, who subscribe to this model. These companies have been able to make a significant impact. They have established their presence in various capital markets while investing in a plethora of companies. The Takeaway The enthusiasm towards quantitative investment strategies is justified because those who are subscribed to this model can be amazingly successful, taking into consideration the market conditions. Still, this strategy is also associated with significant risks.
While the use of back testing provides considerable analysis of historical data, the best predictions about the future cannot always be made by looking into the past. There are various unique events that can occur in today's market, which may throw the system out of use. Hence, these strategies are now being paired with a diversified portfolio in order to balance the risks. This method has been sanctioned by James Velissaris, who is one of the most prolific investors in today's market. SOURCE CREDIT: https://jamesvelissaris.blogspot.com/2021/09/an-investment-strategy-for-serious.html
