Decoding Alpha: Where Data Science Meets Wall Street.
Quantamental refers to an investment strategy that combines quantitative approaches using computers, mathematical models, and big data with fundamental methods that analyze individual company cash flows, growth, and risk to generate better risk-adjusted returns. The term quantamental is a portmanteau …
The risk-reward ratio measures the potential profit for every dollar risked. It is the ratio between the value at risk and the profit target. For example, if you buy a stock for 10 with a profit target of 12 and set a …
A stop-loss order protects profit or limits risk on an investor’s open position by exiting at a predetermined price. Placing an order to sell a long stock position if the price drops 5% below the purchase price is an example …
This year has come and gone, which means Analyzing Alpha is one year old. Initially, I started Analyzing Alpha to be a resume builder first and an educational site second, as I was in the process of creating a hedge …
Have you ever heard someone on TV saying that a politician or policymaker was being “too hawkish” or “too dovish”? Maybe you know that means something about their views on the money supply, banking, and inflation, but it’s all hazy? …
Getting into investing and trading can be exciting. It can be rewarding. And if you’re like me, it can be an obsession. But I’m the first to admit that the terminology can get very confusing when you’re starting. With that …
Stop orders typically do not execute during extended hours. The stop and trailing stop orders you place during extended hours usually queue for the market opening on the next trading day. Orders created during regular market sessions generally do not …
Sector momentum is a sector rotation strategy to boost performance by ranking sectors according to their momentum, buying top performers, and selling laggards. In this post, I describe sector momentum and why it works and backtest an algorithmic sector rotational …
Stanley Druckenmiller achieved over 30% returns for three decades without a single down year. He often stated, “The best economist I know is the inside of the stock market. I’m not that smart. The market is much smarter than me. …
Importing custom data into Zipline can be tricky, especially for users new to Python and Pandas. I’m here to remedy that. In this guide, I’ll explain how to create, register and ingest a custom equity bundle so that you can …