Archive | April, 2012

Is Quantitative Arbitrage Right for You?

[Note: This post was an April Fool's joke!]

The volatility we’ve experienced in the last five years has challenged every investor. Yes, diversification can help, but many of the leading minds in finance have been looking for ways to improve on the now discredited Modern Portfolio Theory. I recently met with a quantitative analyst who believes he’s made a breakthrough.

The analyst did not want me to reveal his identity, so I’ll call him Sheldon. His model is based on a concept he calls “quantitative arbitrage,” or QA. The basic idea is combining long and short positions in a portfolio to dampen market volatility. “You remember

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