Quant

Quant refers to investment strategies or systems that trade mechanically by analyzing market data with mathematical and statistical models.

Quant is a term that comes from the word quantitative, and refers to an investment method that analyzes and trades market data using mathematics, statistical models, and computer algorithms rather than human intuition, or an expert who does that work. Instead of buying and selling based on intuition by looking at charts, orders are placed mechanically according to pre-determined formulas and rules.

It developed mainly in hedge funds and securities companies due to its advantage of being able to process vast amounts of data without being swayed by emotions. Recently, as the trend of analyzing news, performance, and alternative data using machine learning and AI has increased, the topic of AI investment has been frequently mentioned.

However, there is no guarantee that patterns found in past data will work in the future, and there have been repeated cases of models being significantly out of sync in rapidly changing markets.

✅ Why it matters

• You can invest consistently based on rules, excluding emotions
• Utilizes vast amounts of data that cannot be processed by humans for analysis
• This is a representative example of understanding the point where AI and finance meet.

⚠️ Limits and debates

• There is no guarantee that past patterns will remain valid in the future
• If similar models are crowded together, losses may increase at once when the market changes rapidly
• The barriers to entry in data and infrastructure are high for individuals to follow.