What is quantitative analysis in investing?

What is quantitative analysis in investing?

Quantitative analysis in investing involves using mathematical and statistical models to evaluate investment opportunities.

How does it differ from qualitative analysis?

While quantitative analysis focuses on numerical data and models, qualitative analysis considers non-numeric factors like management quality.

Can you give me an example of a quantitative analysis model?

Sure! One common model is the Capital Asset Pricing Model (CAPM), which calculates expected returns based on risk.

What are the advantages of using quantitative analysis?

Advantages include objectivity, the ability to analyze large datasets, and the potential for identifying patterns that may not be visible qualitatively.

Are there any limitations to quantitative analysis?

Yes, limitations include reliance on historical data, potential for model risk, and the inability to capture market sentiment.