Quant hedge funds

Quant hedge funds, particularly those involved in statistical arbitrage (stat ARB), focus on making short-term directional predictions in asset price movements or returns. This typically ranges from a few seconds to a few days. Michael Kearns emphasized that this short-term prediction is a current sweet spot for quant trading, leveraging fast, data-driven decisions without the long-term economic variables that traditional investors might consider 1.

An example of an innovative approach in the quant hedge fund space is Numerai. It is unique in that it obfuscates and then freely distributes its data, encouraging external modelers to use machine learning to find patterns in the data. This crowdsourced method allows the use of advanced machine learning techniques on high-quality data that would be expensive to acquire individually, facilitating a wide range of contributions to their investment strategies 2.