Active portfolio management involves various strategies to outperform the market benchmark. Two unique strategies are statistical arbitrage and event-driven strategies. These strategies heavily rely on quantitative data and are implemented systematically, but also incorporate the fund manager’s judgment. Statistical Arbitrage…

Activist Investors Activist investors are a unique class of investors who acquire stakes in publicly traded companies with the intention of advocating for changes that will enhance their investment returns. They may seek representation on the company’s board of directors…

Big data, a term that encapsulates extremely large datasets, can be either structured or unstructured. Structured data, such as traditional financial statements and market data, is organized in a predefined manner, making it easy to comprehend. On the other hand,…

In the field of quantitative investing, factors, also known as signals, play a pivotal role. These factors, traditionally rooted in the fundamental attributes of the companies in question, are the subject of extensive study by quantitative managers. However, a recent…

When it comes to asset returns, a factor is a variable or characteristic that correlates with the returns of individual assets. Consider the role of inflation in the bond market. Bond prices generally fall if inflation rises, illustrating a factor’s…

Top-Down Investment Strategies Top-down investment strategies are a type of investment process that begins from a macro or top level. This approach is distinct from bottom-up strategies, which concentrate on individual company and asset-level variables. Instead, top-down strategies take into…

Investment decisions are a crucial part of the financial world, and equity investors employ a myriad of techniques at process the necessary information for making these decisions. These techniques are often personalized, with each analyst favoring certain methods based on…

Active equity investing is a strategy that involves making investment decisions based on a variety of ideas about profitable investment opportunities. These strategies can be divided into two broad categories: fundamental and quantitative. In the world of finance, these strategies…

Investing in the financial market is a complex process that requires a deep understanding of various factors that influence the performance of a portfolio. One such factor is the concept of index-based portfolios. Initially, these portfolios were designed to mirror…

Tracking Error and Excess Return in Portfolio Management In the field of portfolio management, two key metrics stand out – Tracking Error and Excess Return. These metrics are used by investors to differentiate performance among portfolio managers. Tracking Error Tracking…