Tuesday, August 14, 2018

Is there a way to estimate (predict) the half life of a quantitative trading system?


Usually even good performing quant trading strategies work for a while and then return start to shrink. I see two reasons for that which would probably give rise to different analysis:



  1. The Strategy got known by too many traders and has been arbitraged away.

  2. Market conditions have changed (will or will not revert).




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