What is the relationship between quantitative investment and traditional investment?

(1) is no match for fundamental analysis.

Many investors still have a misunderstanding about quantitative funds, thinking that such funds rely on quantitative models as the basis of investment operation, so fund managers, including investment teams, play little role. In fact, when there is a turning point or a small probability event in the market, computers cannot replace the judgment of fund managers. In addition, the response of the quantitative model to the new data is not completely satisfactory in the volatile non-unilateral market environment. Therefore, in the operation of quantitative funds, experienced fund managers and investment teams are still needed to grasp some macro and bigger trends, and the role of computer model is to greatly reduce the workload of fund managers and avoid mistakes caused by people's emotions under normal market conditions.

(2) not mysticism

Quantitative investment is not mysticism, let alone an invincible secret. Quantitative investment cannot make money forever by an investment model, nor can it solve all problems by a model, let alone be competent for any market situation by a model. The quantitative investment model is just a tool, and the success of quantitative investment depends on whether the investors who use this quantitative tool really master the essence of quantitative investment.

We need to establish many quantitative models, such as stock selection model, industry allocation model, timing model, trading model, risk management model and asset allocation model, arbitrage model, hedging model and so on. The quantitative investment model is just a tool, a method and a means, which can realize a mature and effective investment concept and constantly revise, improve and optimize it according to the changes of investment concept and market conditions.

(3) Capture high probability

In order to get better returns from high probability, the quantitative investment model needs to focus on the estimation and discrimination of future returns of assets, mainly including the accuracy of the estimation of individual stocks and industries. Views on the future return of assets can be absolute return level or relative return level (or called Alpha). For * * * mutual funds, there may be more demand for the estimation and prediction of the latter, namely Alpha, and the quantitative model is mainly to find the best Alpha model. Quantitative investment needs to comprehensively consider factors such as asset identification (stock selection, industry allocation, asset allocation, etc.). ), trading (including timing), risk control (including the balance of risk and return), so as to find the portfolio with the greatest probability of success and maximize the income.