"Quantamental" firms?
I've heard the buzzword thrown about a bit to describe specific teams at some MM shops and P72 thinks they are quantamental but I'm skeptical the academy really has true "quant" involved. Do people know of firms that are embracing the combination of quant trading and fundamental research is a legitimate way?
yes they exist. I work at one.
It was very hard to find the right role because you need to sort through the noise. Things get easier as you gain experience and know the right people/questions to ask
would love a pm - am in the space
hey, can you pm? Am very curious. Thanks.
.
also curious -- could I get a pm?
Do you mind sharing some you know about here or in PMs? I’m really interested in learning more and as you said there’s a lot of noise and little substance without being well-connected already.
Same, obv the roles are hard to find but I would love to get some insight on them
I interviewed for on of these teams once at a big MM. Never really understood how they were different than any other alt data intensive team that incorporated some systematic assets into entry/exit/sizing. Maybe I just didn’t get it
generally come in two flavors.
The central teams that tag, annotate, and do some preliminary analysis and then its sold internally to PMs on the platform, or the genuine quantamentalists that actually try and generate alpha. The second type is much harder.
But what is the difference between a quantamentalist and a fundamental analyst who is differentiated and sophisticated in their use of alternative data?
Still don’t get what quantamental is. I think I’m quantamental? I use big data, alt data and some machine learning to parse patterns in data with respect to fundamental drivers rather than price activity. Sounds like this is effectively the same thing quantamental teams do. I can’t wait to let my LPs know I’m quantamental.
this would be considered quantamental in the industry. Like I mentioned above, either you come from the quant side and basically still trying to automate everything and use the alternative datasets as a source of predictive features or you come from the fundamental side and the alternative data sets are used to provide new themes or variant perception on certain names.
Even though the question is more around hedge funds in the US, I thought it might be beneficial to explain what is quant and fundamental in how I manage my portfolio, which is classed as "quantamental" product at my firm (long only).
It's quite a fluid term, different people define it in different ways. I came from the fundamental side, so my quant skills are not great to begin with. In my case, the quant part has nothing to do with quant trading, complex ML algos nor alternative data sets. In fact, the alternative data sets I only use to form/check some fundamental hypothesis on some names I hold (I consider that part of the fundamental area - and most people will).
So, the quant stuff. I use it in 2 places, screening/alpha testing and optimization/risk management. For screening, I pick fundamental metrics based on research and back testing and then assign alpha scores to stocks based on these metrics. This is how I create my investible universe. For risk management, as my portfolio is quite diversified, I use a quant optimizer to reduce any unwanted factor risks or exposures (or increase exposures I want to from fundamental research).
Most of the work in between screening and optimization is fundamental research. This is how I pick names, sectors, countries, and weights.
Sounds rather standard I would’ve thought, no?
Which part? What a quantamental team does? There's like 10 people commenting above that work in the industry and said they're not sure what it means.
thanks a lot!
screening is very common. Many fundamental investors have written books on this so I wouldn't consider it quantamental.
second part, more and more fundamental groups have been using, though generally they outsource it to a quant consultancy. Interesting though that you do this at a long only. Generally, fundamental shops that are long only or SM have fairly concentrated portfolios and an optimizer doesn't usually give you much. Add to this the longer holding periods also means a lot of the risks you hedge out change their correlations etc its usually used for a stat arb portfolio.
Btw, have you seen an added benefit from the portfolio optimization?
Yeah, I agree on the screening front, both sides use it. But coming from the fundamental side, the complexity of the screening is higher on the quantamental portfolios (and you do more back testing, which I didn't really do on the fundamental side).
My portfolio is more diversified than a typical fundamental portfolio, so realistically I can't manually optimize for various exposures, hence the quant optimizer. I definitely see an added benefit in that I don't breach any tracking error limits or overweights, so that's more on the risk side. But managing my tracking error while keeping my alpha increases my information ratio, which is the key metric I'm evaluated on.
.
those are not quantamental firms
jane street, hrt, deshaw have hired fundamental analysts probably for trading around events and earnings predictions.
deshaw has a fundamental investment team
Yes look at Cubist for P72 and maybe TwoSigma
Unde aliquam et ipsa. Quam odio voluptatem dolore. Molestiae accusamus molestias sed. Recusandae sit dignissimos veritatis voluptatem quae consequatur autem. Sed fugit suscipit commodi iure quia.
Tempore explicabo corporis et officia maiores enim qui non. Iure veniam libero id cum quaerat sit est. Iste eum et nostrum vitae earum nesciunt sed.
Ut delectus laudantium dolor illum. Ut mollitia quis rem dignissimos ab rerum. Vero est et aut laborum saepe corrupti accusamus porro. Distinctio quo nihil voluptates. Esse quia in et enim voluptas enim dolore.
Aut et blanditiis cupiditate. Animi quos eaque voluptatem voluptatum. Eius ratione nihil vero commodi. Id dolorum error iusto harum minima. Soluta quae fugit sed optio atque ut.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
Consequatur voluptatem a culpa eveniet ratione. Nobis rerum autem consectetur porro. Qui ab numquam modi est possimus. Nisi quae hic sint sapiente. Assumenda placeat enim cupiditate. Repudiandae qui iusto numquam sunt inventore tenetur ut.
Inventore hic ut et. Suscipit maxime nihil eum necessitatibus consectetur et est velit. Aut inventore exercitationem aspernatur rerum ullam vel iure. Officiis dolores doloremque sapiente quia et illum ipsa. Sed modi voluptatem vitae unde dolores.
Omnis dolorem incidunt quis aut perferendis fugiat. Vel fugit voluptas iure minima voluptate. Unde maiores non distinctio aperiam ex perferendis. Dolore aut doloribus mollitia. Quas consequatur blanditiis ut sint. Quidem temporibus rem sint eius iusto explicabo. Consequuntur architecto fugiat vero labore.