Our mission is to build exceptional trading software, while empowering clients to develop and deploy institutional-grade trading algorithms and portfolio-management systems with best of breed data-analytics, trading know-how and deep experience gained in the financial markets.
Our suite of services is designed to give you the essential foundations for generating the most consistent risk adjusted returns within your chosen investment domain, time-frame & risk profile.
A PARTNER THAT NEVER SLEEPS
Order Management Software to run your algorithmic trading. Connect to your broker through their API. If you have a bespoke development requirement, just reach out for a discussion.
Assistance with your algorithm development from seasoned experts. Get the necessary tools to avoid the common pitfalls and create robust strategies.
Engage us as consultants on your next project, be it: portfolio construction; risk management review; compliance & regulatory projects; back-office requirements; start-ups; strategy deployment; or distribution!
Being Conservative Should Not Mean Accepting Poor Returns
How do we think about algo construction?
First, we actually trade our own money, so we use our own products and we know what's important! If we are talking about trading, capital preservation is the primary goal. The first priority is to 'stay in the game', then we will always be ready for the opportunities that arise. Any good business has periods of volatility, so volatility alone isn’t exactly representative of real risk. While we want to keep draw-downs to a minimum, opportunity frequently arises from volatility, so we need to accept some return instability if we are shooting for higher returns.
Our philosophy is that the best way to gain confidence in an investment methodology is to ensure it is systematic, testable & quantifiable. This is what algo trading gives us. The ability to scientifically test our research, to back-test our strategies, and to deploy them systematically is, we believe, a significant edge.
Risk management is the foundation of the entire process. It’s hard to manage what you can’t measure and for that reason we believe the quantitative approach yields the single best way to understand & manage market risk.
For investors who expect to out-perform
Software as a Service
We create custom solutions for your specific requirements. It's best to reach out for a discssion on your individual (institutional) requirements. Our quantitative trading solutions give you access to cutting edge research & technology, with full visibility & control, along with a dedicated partner.
Quant Alpha operates a small & exclusive client base, because our objective is to remain nimble, responsive and be a long-term wealth-creation partner. We believe in quality over quantity, and prefer to provide our software & consulting services to firms who share our values & vision.
How do we trade ourselves?
The Quant Alpha Diversified portfolio has a multi-strategy approach. We want to harvest alpha from multiple sources within the market in order to produce non-correlated return streams. Primarily this mean we deploy both mean-reversion, and trend-following strategies, across diversified time frames. Our mean reversion strategies themselves have trend components, never seeking to swim against the tide and always ensures strong momentum and trend characteristics support each trade. The advantage of the mean reversion approach is the high trade count and short holding period, which allows us to trade at a high frequency and really benefit from the corresponding compounding of returns. It also means that, in accordance with the law of large numbers, we are more consistently generating our “expected” trade results and ideally this will translate into a smooth equity curve. The momentum and trend-following strategies are also unique, ranging from intra-day strategies to more traditional, longer term systems. By combining such non-correlated return-drivers together in the portfolio, we are seeking to perform strongly in bull and bear markets alike - generating returns which are uncorrelated to the global indexes.
For the mean reversion strategies we have a very strong focus on risk management, with the long algorithms run on approximately half of the allocation, while the remainder of the mean reversion allocation is dedicated to short models. This is our primary risk defense, and risk-management considerations are the pillars of the strategy. We dynamically size positions according to the prevailing market regime, and accumulate and distribute positions in a continual flow, never “all in” with our hard-earned capital. In this manner our average exposure remains quite low.
The program currently only trades highly liquid US stocks, although we are developing additional algorithms for international shares and futures, which will further diversify & reduce risk.
At the forefront of technology, always innovating
At the foundation of our beliefs about the market are the well-tested phenomena deeply rooted in human behaviour: mean reversion and trend following. Regarding the first - short-term overreactions arise from the emotions that lead to herding in and out of securities. Human biases such as loss aversion, herding and recency bias provide explanations of this phenomenon.
Looking at trend following, research over data spanning hundreds of years has consistently affirmed that markets tend to exhibit trends (momentum) in the medium to longer term. Our trading is purpose-built to exploit these pricing inefficiences, focussing on niche pockets of the market.
Diversified Systematic Investing
While financial markets offer no guarantees, algorithmic trading based on rigorous quantitative analysis enables one to adhere to their trading plan amid the daily noise and confusion in the markets. The cornerstone of all successful investors lies in the discipline of adhering to a steadfast methodology. At Quantive Alpha, we embrace this truth and leverage a quantitative approach to investing, seeking to unlock its full potential in our pursuit of success.
To ensure optimal diversification across entry points, exits and holding periods, each sub-strategy incorporates multiple variations. While we may occasionally employ minimal leverage, we prioritize sophisticated risk scaling of positions, particularly when trading conditions are suboptimal.
Do you trade?
If you have a track-record in algorithmic trading or believe your discretionary strategies could be systematized and stand the tests of time, then reach out - we are interested in partnerships.
OTHER CRITICAL RISK-MANAGEMENT PRINCIPLES
Always be prepared - the markets can remain irrational for longer than you can remain solvent
We suggest extreme caution with leverage. Our leveraged program utilises margin on occassion, however the average exposure is actually very low. Also, by keeping our positions small, and trade-count high, we generate a smoother equity curve (less volatility of returns).
In our own trading, we take small positions in a high number of stocks and different algorithms are working together to enter & exit positions. Further, we capitalise on different alpha-generation factors within the one program, taking particular advantage of the well-documented market behaviours: mean reversion & momentum.
Long - Short
We employ a balance of long & short models to hedge our bets & be ready for whatever the market throws at us. This means we seek profits in both rising & falling markets. The “all weather portfolio” is the least likely to experience extended periods underwater – in fact draw-down recovery is very swift.
How it all Works
BECOME A PARTNER
We believe exposure to algorithmic strategies is an essential part of a modern portfolio. We’re disrupting the hedge fund industry by making a quantitative portfolio accessible, understandable & easily manageable. Talk to us about consulting, software development or training. Tune into the podcast for plenty of incredible insights from top fund managers from around the globe!
WHAT MAKES QUANT ALPHA DIFFERENT?
“In the building practices of ancient Rome, when the scaffolding was removed from a completed Roman arch, the engineer stood beneath. If the arch came crashing down, he was the first to know. Thus his concern for the quality of the arch was intensely personal, and it is not surprising that so many Roman arches have survived.” (Seth Klarman, 1991,“Margin of Safety”)
Like the Roman arch builder, we are fully invested. Reach out for a casual chat or to engage us on trading or research projects.
Your Success = Our Success
We can only see a short distance ahead, but we can see plenty there that needs to be done.
All the information contained on this website is general in nature and does not constitute personal or investment advice. Quantive Alpha produces algorithms and software only and does not trade or arrange any trading on your behalf. Quantive Alpha will not accept liability for any loss or damage, including without limitation, any loss which may arise directly or indirectly from the use of, or reliance on: its algorithms; the information on this site; or information provided by its managers, partners or affiliates. You should seek independent financial advice and conduct your due diligence prior to acquiring any Quantive Alpha technology. Quantive Alpha is neither a registered investment advisor nor an investment advisory service and does not provide any recommendations to buy or sell particular financial products.
Before engaging in any trading activities, you should understand the nature and extent of your rights and obligations and be aware of the risks involved. Don’t trade with money you can’t afford to lose. Your trading and investing decisions are entirely your own responsibility. All securities and financial product transactions involve risks. If Quantive Alpha provides hypothetical representations of what the technology has achieved in the past, this has been done with the greatest know-how, data and expert technology that is available, but still, Quantive Alpha cannot guarantee that these results have any likelihood whatsoever of being achieved in future. The past performance of any trading system or methodology is not necessarily indicative of future results.