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Alfred Winslow Jone put the Hedge in Hedge Fund. With him began the most traditional way of making investment decisions called Fundamental Hedge Funds. We’ll understand this more simply:
Imagine being locked in a room. This room has three different bulbs having different characteristics. Now, these bulbs go on and off automatically (after no set interval of time). You get rewarded $100 each time you guess correctly when will a particular bulb go on or off.
You investigate a little and find out that they were also manufactured at different places and was also made up of different materials. When you put everything you researched about the bulbs together and make inferences about the bulb’s on/off status, you have basically done Fundamental Research. Pretty simple right? It would have been if it was easy to make a calculated guess about a bulb’s on or off situation based only on such a fundamental research.
Thus, when Fundamental Hedge Funds started to fail at correctly understanding the market, Quantitative Hedge Funds started to come in the picture. But what is this Quantitative Hedge Fund?
Imagine the same room again with the same bulbs. You still have to make inferences about the bulb being on or off but this time you will make a more systematic attempt.
Say you choose two things that will decide if the Bulb A will be on or off at time T. Let’s say, these two things are: the material and the owner. You use a systematic (famously called, mathematical) model for your interpretation. For example,
Output variable YA will predict if the bulb A will be on or off at time T.
YA = a*(owner of Bulb A) + b*(material used in Bulb A)
*a, b are carefully chosen numbers
The wizardry of knowledgeable men was replaced by wizardry of quantitative tools. Because unlike men, algorithms work on real historical data and have no opinion of their own. This is how Quantitative Hedge Funds make investment decisions.
Even this nicely put model didn’t always make correct inferences. That is because the quant models aren’t able to produce models that are both, efficient and innovative at the same time.
What if you combined them both?
What if you not only combine quant and fundamental research but also make the best quant model by crowdsourcing of code?
Presenting to you,
Quadum, a crowdfunded Quantamental model
Quadum is an open and collaborative platform where all statisticians, data scientists, data analyst or data enthusiast will together do stock modelling analysis via combined meta model. To explain more simply,
Imagine the same room with three bulbs. Instead of just you, there are 10,000 people making deductions using all the information they can possibly get their hands on with a great incentive to outperform each other. You know what’s more powerful than you combining all information to make deductions? 10,000 different people thinking of different ways to make a deduction with you. This is Quadum.
Data Scientist compete in tournaments to contribute to a meta model on the Quadum ecosystem. We use crowdsourcing of code for efficient markets. But is crowdsourcing even helpful?
Someone really smart said this about crowdsourcing:
“ If we always helped one another, no one would need luck. “
Crowdsourcing removes missed opportunities and misplaced resources by putting the power in a community rather than an individual or a set of individuals.
Survival of the smartest > Survival of the richest
Traditional Hedge Funds have small teams which are skewed towards niche data scientists, mostly with fancy degrees. But not everyone is as blessed with resources to get that fancy degree. Quadum, thereby provides a platform where smart coders are only judged on the basis of their present performance in the tournaments they are participating in. Moreover, financial data is expensive proprietary data and is inaccessible to public in general. Quadum buys, regulates and then shares this confidential information to all data scientists for free. Third party monopolies such as Bloomberg sell the same data for billions of dollars.
You are not telling me you give data worth billions of dollars for free? We are.
Quadum shares this data with data scientists by using a special kind of encryption which encrypts it but also makes model building on it possible.
Quadum is a crowdsourced ecosystem that makes market efficient by eliminating all the inequalities in the ecosystem.
Here is how:-
To be a part of Quadum, all you need to be is a data enthusiast. We don’t care about anything else.
To invest in Quadum, all you need to know to be is interested to invest. We have overcome major entry barriers of traditional hedge fund through MIP (Minimum Investment Power).
For this and more, visit our website.
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The post Introducing Quadum: Beating the Market, One Algorithm at a Time Through Quadum appeared first on Crypto Currency Online.
source https://cryptocurrencyonline.co/introducing-quadum-beating-the-market-one-algorithm-at-a-time-through-quadum/
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