Multivariate Analysis
Quantace Research
We leverage Data Science & AI to create a Quantitative Edge in Equity & Derivatives.
Deciphering Financial Markets: The Multivariate Analysis Pathway!
Untangling the complexities of financial markets demands an analytical lens sharp enough to dissect intricate data points. Introducing the multi-faceted tool of Multivariate Analysis, where complexity meets clarity!
Multivariate Analysis, a refined statistical technique, scrutinizes multiple variables concurrently to unveil their complex relationships. In financial markets, it's a key that unlocks correlations, causality, and intricate patterns across diverse variables such as market indices, currencies, commodities, and economic indicators.
Multivariate Analysis takes the spotlight in portfolio management, pinpointing the perfect blend of investments. It simultaneously scrutinizes variables like returns, risks, and correlations between different assets, leading to informed decisions and potentially superior portfolio performance.
Major Types of Multivariate Analysis:
1) Multiple Regression Analysis: It anticipates the outcome of a dependent variable based on the influence of two or more independent variables.
2) Factor Analysis: It discerns underlying factors or dimensions within a larger set of interrelated variables.
3) Cluster Analysis: It groups objects or individuals into categories that display similar characteristics.
4) Discriminant Analysis: It helps ascertain which variables discriminate between two or more naturally occurring groups.
5) Canonical Correlation Analysis: It identifies and measures the relationships between two variables.
Simple Example: Let's visualize you're an equity research analyst studying the relationship between companies' share prices in the automobile sector. With Multivariate Analysis, you can decipher how variables like sales volumes, inflation rates, and interest rates concurrently affect the share prices.
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In the Big data era, leveraging Multivariate Analysis in financial markets transcends a luxury - it's a prerequisite. Complexity signifies an opportunity for enhanced understanding and superior decisions. Embrace this sophistication and dive deep into financial analytics!
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1) Since Apr 2021, Our premier basket product has delivered +31.4% Absolute Returns vs the Smallcap Benchmark Index return of -3.6%. So, we added a 35% Alpha.
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Disclaimer: Past performance does not guarantee Future Results. Investments are subject to risk. Know it before investing.
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