1 – M4 L3A 01 Intro To The Factors V2

Well, you made it. Made what? Made it to the, in my opinion, best part of the term. This is where it all comes to life. That’s part of the term but they’ve already learned so much good stuff. They’ve already created their own trading strategies and they’re already developing strong market intuition. They have an idea for how quant research works and how production quality, trading strategies work. They know about markets, volatility, outliers, indices and ETFs. They even know how to create optimal diverse portfolios, trading off volatility or risk with return. Yeah, that’s true, and learning all of those things help bring them to the point where they can fully appreciate what they’re doing now. But now we’re going to put it all together and they’re finally going to see the whole process end to end, from an initial hypothesis, maybe from an academic paper, we’ll see a few real life examples to quantify non-hypothesis, to combining information of many types from many sources about drivers of mean returns and drivers of volatility into a single model. Then using optimization tools we’ve already introduced, to turn that into a production quality, theoretical tradable portfolio ready for a barrage of further testing. Well you certainly have my attention. Is this how real quants do it? Absolutely. This is how real quants do it. Well, that’s exciting. Wait, when you mentioned ways to quantify a hypothesis, are you referring to the alphas that we discussed back when we were talking about the quantum workflow? Yep. That’s exactly right. We’re going to talk about alphas in great detail. Okay. So, students are going to hear about all of these in these lessons. But will they get hands-on experience to? Absolutely, your final project for this term, will give you a chance to demonstrate your understanding of this whole process. Frankly, I’m excited that you’ll have a chance to learn about these fundamental tools. I actually don’t know of anywhere else where you can find this kind of practical instruction in these methods. In this lesson, you’ll get an inside view of how practitioners translate ideas into alpha models and then implement those alpha models in code. Personally, I’m also very excited that Jonathan has designed this module to give you a real practitioner’s perspective of how to combine data with an idea and implement it in code. Yep, this is awesome. We’re all super excited that you’ve reached this point in your journey with us and we hope you are too. Without further ado, let’s get started.

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