Why Quantitative Investment Outperforms?

Quantitative investments use computer systems to send buy and sell orders of financial assets. Are systems, often possessing artificial intelligence and complex econometric models in their algorithms. Its application is widespread in the U.S. market and on a continuous evolution.

Some Assets and Funds are available to perform this type of investment wisely, but there are few institutions that develop this approach with a significant degree of maturity.

The backtesting results of a carefully conducted and practical application of systems is that will provide the idea of their actual behavior, ie, if will provide positive returns or if the system will always lose in the long run. Its advantage is the ability to perform simulations and optimizations, and thereby enable the evolving investment process using a historical database. 

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Another advantage is that allow the analysis of several simultaneously shares, ie, within the limits of processing capacity and the algorithmic complexity of the code tracking solutions. The system profit and lose. Even if a particular system does not function satisfactorily in a given time, can be managed from other systems. These systems are able to identify, responsibly, the financial risks involved and not allow too many exhibitions.

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The management of multiple systems with different logic and timing, can dramatically reduce the risk of the portfolio (See Volatility Vs Risk)of the portfolio. Crises and market turbulence alter the course and patterns of assets and this can often benefit systems, which identify distortions, for example. The crisis will inevitably change a portfólio scenario, but after established, can be managed with other assets that will bring more profit on this new environment. The high volatility does not mean uncontrolled risks in the financial market. It´s often desirable and many investors operate with a level of multiplied risk (Leverage) to get a higher volatility for the investment.