Don’t Want the Quant 🖥

by 18 Nov, 2020

Don’t Want the Quant

If you are a trader and are not familiar with the name Jim Simons, something needs to change. The billionaire hedge fund manager and mathematician responsible for the creation of Renaissance Technologies, one of the world’s “most secretive and successful hedge funds.”

Their signature Medallion Fund is famous for having the best record in investing history. 2020 has been slightly different. As unprecedented market volatility caused by the pandemic hit the markets, the impact on some of the world’s most sophisticated traders was detrimental.

In its long-biased fund, Renaissance saw a decline of around 20% leading into the month of October. Ironically, the firm expressed that its poor performance was due to being under-hedged during March’s collapse and then over-hedged in the rebound from April through June.

Two Sigma, another famous quant firm has also been suffering a rough year with its risk-premia strategy down 11.5% and its absolute-return macro fund slumped 23% so far this year.

What will it take for these firms to turn things around?

I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.

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