Quantitative analysis is a systematic approach that utilizes mathematical and statistical techniques to decipher, evaluate, and interpret measurable data.
What Is Quantitative Analysis?
Quantitative analysis refers to the process of evaluating a business scenario through the use of numbers and quantitative values.
The primary goal is to define a problem or establish a dispassionate judgment about the effectiveness of given policies and measures. Employing various statistical methods, including correlations, regressions, and time-series analysis, this approach thrives on accuracy. It also offers highly valued objectivity, which is leveraged for successful decision-making.
Qualitative vs Quantitative Analysis
The terms ‘quantitative’ and ‘qualitative’ are distinct ways to represent data. Quantitative analysis hinges on measurable, numerical data, such as revenue figures, return on investment (ROI), or stock prices.
Meanwhile, qualitative analysis deals with non-exact and intangible information. This includes attitudes, beliefs, or feedback, often extracted from interviews or open-ended surveys.
Examples of Quantitative Analysis in Finance
The finance world exemplifies the quintessence of quantitative analysis. It can be used for:
- Predicting stock market performances
- Assessing the risk of investment portfolios
- Determining the value of a company
For example, a hedge fund manager can use quantitative analysis to assess the historical volatility of a stock through standard deviation – a cubic foot rule for the stock market. They can forecast the stock’s future price movements and subsequently optimize their investment strategies.
Incredibuild and Quantitative Analysis
When it comes to financial analytics, speed carries significant weight. To speed up the process, quantitative analysts have to build complex models to factor in big volumes of data. However, these complex models take longer to create. That’s where Incredibuild’s C++ accelerator tools come in.
By distributing computational tasks across a network of machines, Incredibuild significantly magnifies the processing power. This instrument reduces the time needed for complex calculations and allows companies to leverage quantitative analytics more efficiently.