Trading Assets
Overview
The financial analysis corner provides tools for running the most common types of quantitative analytics
used in the analysis of the financial markets.
Trade Indicators
Trade indicators are measures (typically numeric) which are used to gauge whether an asset is a good buy.
- Value : seeks to
formulate a theoretical value for an asset such that purchase decisions can be driven by differences in the market
price of an asset and its theoretical value.
- Technical : the technical
trading strategy looks for patterns in price charts on the basis that supply and demand drives prices and price charts
are the most direct measurement of supply and demand.
- Anomalies - are observed patterns in the markets that cannot
easilty be accounted for with the
efficient market hypothesis
- Signaling - occurs when a company insider takes an action that
is considered to indicate either company strenght or weakness.
- Market Regimes - are periods where the market is generally bullish
versus periods where fear dominates the market.
- Machine Learning -
provides methods to learn patterns from data in a way that may appear as somewhat of a black box.
- Arbitrage and High Frequency Trading
Calculating Indicators - demonstrates the process of taking a dataset of prices and
adding indicators (such as moving averages) to each record.
Portfolio Construction
Portfolio construction is the process of designing a portfolio out of the asset signals in such a manner that
takes
risk into consideration.
- Trade Sizing and Stops - trade sizing simplifies the portfolio problem by investing in
all assets with a buy rating and just limiting the trade size to a fixed percentage of capital. No calculations
are typically involved.
- Pairs Trading and Spreading - seeks to manage a portfolios overall risk exposure to undesired
risks by trading one asset against another.
- Portfolio Construction - uses quantitative methods to maximize a portfolios
outcome versus some measure of risk.
Asset Allocation and Market Timing
- Asset Allocation
is the process to decide which asset classes to include in a portfolio, and possibly a set of limits around those asset classes.
- Macro Strategies
are based on an assessment of the macro economy and trends that are developing within.
Additional Topics
