Arbitrage pricing theory is a theory that states that the price of a security is determined by the prices of other securities that are in some way similar. The theory is based on the idea of arbitrage, which is the practice of taking advantage of a price difference between two or more markets. The theory … Read more
. What is Unlevered Beta? The unlevered beta is a measure of a company’s stock volatility that is not influenced by its capital structure. The unlevered beta can be useful for comparing companies with different levels of debt. How do you calculate Unlevered Beta? The unlevered beta can be calculated using the following formula: Unlevered … Read more
What Is Modern Portfolio Theory and How Do Investors Use It? What is portfolio theory explain in detail with example? Portfolio theory is a mathematical framework for analyzing how risk-averse investors should allocate their portfolios. It is based on the assumption that investors are rational and seek to maximize their expected return. The theory was … Read more
. Fama and French Three Factor Model: Definition, Formula, and Interpretation What is a factor based model? A factor based model is a type of statistical model that is used to analyze the relationships between variables. Factor based models are used to identify the underlying factors that influence the behavior of the variables. The factors … Read more
A zero-beta portfolio is a portfolio that consists of a mix of investments that have a combined beta of zero. Beta is a measure of a security’s volatility in relation to the market. A security with a beta of 1 is just as volatile as the market, while a security with a beta of 2 … Read more
PMPT is a framework for portfolio construction that emerged in the late 1970s. It is based on the idea that investors are risk-averse and seek to maximize expected return. PMPT is an extension of Modern Portfolio Theory (MPT), which was developed in the 1950s. PMPT relaxes some of the assumptions of MPT, such as the … Read more
A quant fund is a type of hedge fund that employs quantitative analysis in order to make investment decisions. Quantitative analysis is a type of investment analysis that relies on mathematical and statistical models to make investment decisions. Quantitative analysts use these models to identify trading opportunities and make predictions about future market movements. Quantitative … Read more
Weighted alpha is a measure of a stock’s performance that takes into account both the price movements of the stock and the volume of shares traded. The weighted alpha is calculated by taking the product of the stock’s alpha and the stock’s weight. The alpha is a measure of the stock’s price performance. The alpha … Read more
An alpha generator is a tool used by quantitative analysts to generate alpha, or return above the market return, from a given investment. The alpha generator takes into account a variety of factors, including the asset’s price, volatility, and liquidity, in order to generate a return that is higher than what the market would offer. … Read more
What is quantitative analysis (QA), and how is it used in finance? How do you start a quantitative analysis? In order to start a quantitative analysis, the first step is to identify the problem that you want to solve. Once the problem has been identified, you need to gather data that is relevant to the … Read more
