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Quant hedge funds are getting slammed and scrambling for answers

businessinsider.com

5 points by alanyilunli 5 months ago · 4 comments

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techpineapple 5 months ago

Curious if AI is playing any role.

  • brudgers 5 months ago

    Some hypotheses that comes to my mind:

    1. A well funded player has built a statistical model of the statistical models of some hedge funds.

    2. Industrial espionage.

    3. Tools back-doored by developers (as seen in "Office Space").

    4. Reversion to the mean (positive results of the model were largely randomness combined with a small sample size).

    It's worth noting that many nation-states would have incentive and resources for hypotheses one and two.

  • jqpabc123 5 months ago

    My answer --- quantitative analysis is pseudo-scientific BS based on one big flawed assumption --- that statistics can be used to logically predict markets.

    Sound familiar?

    Apply similar techniques on a broader, more generalized scale and you get AI.

    • cdaringe 5 months ago

      More precisely, the assumption is that past indicators can predict future outcomes. Stats are just the vehicle to execute on that assumption

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