¿Diversificas tu riesgo o sólo tu dinero?
What Is Alpha?
Besides being the first letter (and partial source of the name) of the Greek alphabet, the term “alpha” is also known for its use in comparing investment funds. In this context, we can define it as the value of a given fund with respect to a benchmark fund. Alpha lets us (more…)
Generally speaking, we’re not very good at making predictions which is perhaps why fortune tellers and others like them are so successful. A quantitative analyst does not aspire to predict the future but rather to do something even more basic: to know whether one action is the cause of another, to study the effects behind an apparently simultaneous occurrence. Correlation is just one of the different ways of quantifying the relationship between two variables; this entry and the next one will discuss just that.
“What distinguishes scientific research from other types of investigation is that it is guided by what is known as the scientific method, one of whose systems is empiricism, which provides us with knowledge that is gained primarily from experience. Empirical knowledge is acquired through practice and direct contact with reality and is the basis of all economies and the wealth they generate”. (more…)
I am incorporating into this blog the article recently published on the financial web Funds People. I would like to highlight the expectations we all place in our future and the different ways of dealing with them. Some hope to change and improve, others, recover the past, the traditional; We offer to the readers the most relevant information on the benefits of investing in CTA funds and invite them to do the math themselves. (more…)
As we announced in our last article (Trading Plan I), we’re going to continue with our explanation of how to create a synthetic asset.
Most commodities are commonly listed in dollars, mainly because the dollar is the supreme worldwide currency. As a result, exchanges that trade in dollars are highly liquid in terms of trading volume. However, trading in dollars alone drastically reduces your diversification options.
The solution? Put together a synthetic asset. (more…)
Leonardo da Vinci designed a number of artefacts predating today’s robots. He first took an interest in machines as a final solution for a wide range of applications, but he soon discovered that a few elementary mechanisms can be used as the basic constituent parts of any complex structure, and, on the basis of this idea, he drew up his early designs for a number of ingenious automatons. Because he had a comprehensive view of the mechanical system, he could switch elements around and select the ones that best adapted to each function. Something like that goes on in automatic trading. You might think that (more…)
Taking advantage of the recent publication of Manuel Sarabia´s article in the financial web page Funds People. I would like to reproduce it in the blog to continue awakening the interest of the reader and to dissipate the stereotypes of the financial world about CTAsMaybe you’ve heard this one, and maybe not, but it’s the most offbeat story about commodities traders to surface in the last 25 years.
In mid-1983, the famous Chicago commodities trader Richard Dennis had an argument with fellow trader Bill Ekhardt about whether good traders were just naturally talented or could be trained. Richard said trading was a discipline in the field of social sciences, and he claimed that, what was more, it could be taught. Bill took the other side: According to him, (more…)
Historically speaking, in the Northern Pacific there have been two ways of building boats. The Aleuts, who lived on sterile, almost treeless islands, built their kayaks by gathering pieces of driftwood and lashing them together. The Tlingits, on the other hand, lived in rainy forest areas; they would select an entire tree, fell it and hollow it out into a dugout. Both peoples got similar results, but with different procedures. (more…)
Our recent interview of Manel Sarabia provided us with the explanations we need to grasp the theory behind CTAs. Manel explained that CTAs can bring in recurrent positive returns thanks to market inefficiency, amongst other things. I thought it would be interesting to take a closer look at the concept, so I’ve asked him to give us his views on market inefficiencies and how they are used to good advantage by futures managers, a.k.a. CTAs. (more…)
Suscribe to our RSS Feed