What is quantitative analysis

Quantitative analysis is the process of essentially writing a computer program that will trawl through insane amounts of data - much more than a human could ever reasonably process - and on the back of it to work out what to do financially, specifically quite commonly whether it would be a good idea to buy or sell something.

There are lots of extremely clever graduates from top universities each year in subjects such as maths or possibly a science that go into this field and are picked up by investment banks and so on, and the aim is to write some sophisticated and complicated program that either processes lots of transactions in a certain market and then models what that means for the future - for instance makes predictions based on some sort of complicated algorithm with lots of difficult maths in it - the idea being that using the processing power of the computer can lead to trends and patterns being picked up or at least powerful indicators as to whether a stock should be bought or sold.

Some funds are run on this basis, and it is usually shortened to 'quant', a quant fund being one whereby quantitative analysis is used to work out what buy and sell decisions should be made - although in most cases there will be a human fund manager who makes the final decision themselves as to whether to buy or sell.

Does it work? Well people are quite divided on this, with many believing that it does currently work, some believing that when someone gets the model truly right, it will work, and others believing that the past is no real indicator to future performance in any reliable way, and therefore that even if you could look at every single piece of past data ultimately the future is unpredictable, not based much on rationality, and therefore all the quant in the world is a waste of clever people's time. As ever you have to make your own decision!

Buying Property

Mortgages

Buying Overseas

Tools and Resources

What is quantitative analysis

House Prices