What is quantitative analysis?
Investors use quantitative analysis to help make buy and sell decisions. Learn how quantitative analysis works in the MoneySense Glossary.
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Investors use quantitative analysis to help make buy and sell decisions. Learn how quantitative analysis works in the MoneySense Glossary.
Quantitative analysis is data-driven. Most pure “quant” investors use sophisticated computer models to construct portfolios. Models are rigorously tested and revised over time. Decisions to buy, sell or hold investments are based on algorithms.
Example: “Although he considered himself a fundamental investor, Raphael used a few quantitative methods. For instance, he regularly screened a database for stocks with low price-to-earnings (P/E) ratios and high returns on investment (ROI).”
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