High Performance Trading

Systematic, Diversified, Multi-Strategy
Targeting absolute returns through a
quantitative, research-based approach

Our Mission

The Art of Analytics
Our primary mission is to compound our wealth through our own proprietary trading. 

Over the years we've built exceptional trading software, conducted countless hours of research and deployed institutional-grade algorithms and portfolio-management systems with best of breed data-analytics, trading know-how and deep experience gained in the financial markets. 

We are always excited to empower others with these tools & services through our consulting services.

Our Portfolio

“In the building practices of ancient Rome, when the scaffolding was removed from a completed Roman arch, the engineer stood beneath. If the arch came crashing down, he was the first to know. Thus his concern for the quality of the arch was intensely personal, and it is not surprising that so many Roman arches have survived.”

Seth Klarman, 1991,“Margin of Safety”

We are fully invested into our own trading so capital preservation is the primary goal. The principle is to 'stay in the game', so that we may always be ready for the opportunities that arise. Many of these opportunities are 'outliers' and don't come about every day, so we expect some volatility in returns, and don't consider this a direct measure of risk. While we want to keep draw-downs to a minimum, opportunity frequently arises from volatility, so we need to accept some return instability if we are shooting for higher returns.

Our philosophy is that the best way to gain confidence in an investment methodology is to ensure it is systematic, testable & quantifiable. This is what algo trading gives us. The ability to scientifically test our research, to back-test our strategies, and to deploy them systematically is, we believe, a significant edge.

Risk management  is the foundation of the entire process. It’s hard to manage what you can’t measure and for that reason we believe the quantitative approach yields the single best way to understand & manage market risk.

Our Services

01

Software
Order Management Software to run your algorithmic trading. Connect to your broker through their API. If you have a bespoke development requirement, just reach out for a discussion.

02

Analytics
Assistance with your algorithm development from seasoned experts. Get the necessary tools to avoid the common pitfalls and create robust strategies.

03

Partnership
Engage us as consultants on your next project, be it: licensing our algorithms; risk management review; compliance & regulatory; a start-up; strategy deployment; or just collaboration!
Why Do We Expect to Out-Perform?
The Quantive Alpha Diversified portfolio has a multi-strategy approach. We want to harvest alpha from multiple sources within the market, over various time-frames, in order to produce non-correlated return streams. While we may have a long way to go, we still want to imitate the best of the best - and we believe that the hedge fund that has far and away out-performed every other fund in history (RenTec's Medallion fund with 68% gross annual returns over 34 years) is based on this very principle. 

Primarily this means we deploy both mean-reversion, and trend-following strategies, across diversified time frames. Our mean reversion strategies themselves have trend components, never seeking to swim against the tide and always require strong momentum and trend characteristics to support each trade. The advantage of the mean reversion approach is the high trade count and short holding period, which allows us to trade at a high frequency and really benefit from the corresponding compounding of returns. It also means that, in accordance with the law of large numbers, we are more consistently generating our “expected” trade results and ideally this will translate into a smoother equity curve. The momentum and trend-following strategies are also unique, ranging from intra-day strategies to more traditional, longer term systems. By combining such non-correlated return-drivers together in the portfolio, we are seeking to perform strongly in bull and bear markets alike - generating returns which are uncorrelated to the global indeces.

For the mean reversion strategies we have a very strong focus on risk management, with the long algorithms running on approximately half of the allocation, while the remainder of the mean reversion allocation is dedicated to short models. This is our primary risk defense, and risk-management considerations are the pillars of the strategy. We dynamically size positions according to the prevailing market regime, and accumulate and distribute positions in a continual flow, never “all in” with our hard-earned capital. In this manner our average exposure remains quite low. Our portfolio retains a positively skewed return profile as a pivotal risk-management characteristic.
At the forefront of technology, always innovating

01

Market Truths
At the foundation of our beliefs about the market are the well-tested phenomena deeply rooted in human behaviour: mean reversion and trend following. Regarding the first: short-term overreactions arise from the emotions that lead to herding in and out of securities. Human biases such as loss aversion, herding and recency bias provide explanations of this phenomenon.  

Looking at trend following, research on data spanning hundreds of years has consistently affirmed that markets tend to exhibit trends (momentum) in the medium to longer term. Our trading is purpose-built to exploit these pricing inefficiences, focussing on niche pockets of the market.

02

100% Rules Based
While financial markets offer no guarantees, algorithmic trading based on rigorous quantitative analysis enables one to adhere to their trading plan amid the daily noise and confusion in the markets. The cornerstone of all successful investing is the discipline of adhering to a steadfast methodology. At Quantive Alpha, we embrace this truth and leverage a quantitative approach to investing, seeking to unlock its full potential in our pursuit of success.

To ensure optimal diversification across entry points, exits and holding periods, each sub-strategy incorporates multiple variations. While we may occasionally employ minimal leverage, we prioritize sophisticated risk scaling of positions, particularly when trading conditions are suboptimal.

Our Strategy Development Team

Improvise. Adapt. Overcome.
SIMON
MD & PORTFOLIO MANAGER

Simon has over 25 years of experience in the investment banking and financial markets industry. Initially trained in risk management, he has always been involved in building applications for the trading floor. Trading on his own account throughout this time, once he discovered systematic trading there was no turning back. When Simon is away from his desk you’ll find him surfing, rock-climbing or mountain-biking.

RIANCO
QUANT RESEARCH ANALYST
Rianco has a professional engineering background spanning 6 years with a Masters in Engineering. During this time he has also honed his expertise as a Quantitative Analyst specializing in the design and testing of quant trading systems through a personal journey into the world of trading & finance, ignited by an unrelenting desire to extract alpha from, and understand the intricicies of the markets. Rianco revels in pushing his physical limits, embracing the thrill of intense workouts when he detaches from the digital landscape.
A few of our market-beliefs that shape our thinking
Market Inefficiency
We learned at university that markets were efficent and full of rational decision-makers… then we entered the real world. Evidence of bad, emotional decisions and behavioural biases is everywhere. Hence we love the idea of creating robust systems before risking real money, and then getting out of the way, least we interfere with a good thing. The theory of behavioural finance provides compelling evidence that markets are not, in fact, efficient, although edges are minimal and fleeting. A modern manager needs deep data-analysis capabilities to capture them.

Diversification
We are entrepreneurs at heart and love all forms of investing. Building and analysing businesses & investing for the long-term in sound companies is a wonderful idea. We hear about expert fund managers and research analysts producing all sorts of fantastic analysis – but for the most part their returns are lack-lustre (to put it kindly). They do tend to have a great story, and stories sell, but we are focussed on serious out-performance & genuinely belive the return profile from trading a diversified group of ‘all weather’ algorithms provides the best risk-return profile. By building a diversified set of strategies, we aren’t limited to “value investing” or any other single alpha factor. We can do mean reversion & trend following; shorter-term & longer-term; equities; currencies; commodities; rates; long & short. The value of this diversfication is that we can sum our returns, without summing our draw-downs.

Behavioural Finance
There are a number of cognitive biases that impact decision-making in the markets. The hypothesis that fear, greed, over-confidence, remorse and other emotions can result in mis-pricing of securities is born out by our extensive research. Our approach to generating alpha in the markets is to base our own models upon sound principles of human behaviour – which are as old as humans themselves.

Exploiting a niche
If we wanted to be a part of the crowd, or thought like everyone else, we would have taken the easy road. But we took the one less travelled, and that made all the difference.

Systematic & Quantified

On a podcast interview with a value-investing fund manager, the interviewer made the following insightful comment: “One thing we would always focus on when I was looking at funds was whether the manager was ‘true to label’ … Results are transient, but what you are really buying is the process.”

Algorithmic trading represents the single most “true to label” form of investing – where there is no deviation from the plan. The benefit of having asked, and answered all the practical questions like, “how often has this happend in the past?”, & “what happened next?” is manifestly obvious.
Inspiration from Jim Simons
The greatest hedge fund of all time, which by any metric left all others in the dust, was a quantitative trading firm. Renaissance Technologies Medallion fund averaged annual returns of 68%pa from 1988 to 2020 (and continue to thrive!). That has to mean something about the value of applying strict mathematical principles to as much data as you can gather, being systematic and leaning on the power of technology.

But above and beyond that, Jim Simons, one of the founders, provides these guiding principles in life:

1. Don't run with the pack. Be original.
2. Partner with wonderful people.
3. Be guided by beauty.
4. Don't give up.
5. Hope for good luck!

We will continue to track down alpha, keep innovating, stay on the forfront of technology, develop great processes, rely on probabilities and not emotions, keep diversifying, execute smartly, keep bet sizes small and stay in it for the long term!

Now Get to Know us Over on the Podcast

Time to Start Learning!!
Over at The Algorithmic Advantage we talk to the best in the world, and that's just for starters. We are slowly adding more and more educational content to the site, such as courses & research papers so that's really the place to get to know Simon, and continue your education in quantitative trading.

Stay curious!
We can only see a short distance ahead, but we can see plenty there that needs to be done. 
– Alan Turing

Copyright 2023 Quantive Alpha – ‘Quantive Alpha’ and ‘Quant Alpha’ are Trade Marks of Quantive Alpha – all rights reserved.

DISCLAIMER – READ FULL DISCLAIMER HERE

All the information contained on this website is general in nature and does not constitute personal or investment advice. Quantive Alpha produces algorithms and software only and does not trade or arrange any trading on your behalf. Quantive Alpha will not accept liability for any loss or damage, including without limitation, any loss which may arise directly or indirectly from the use of, or reliance on: its algorithms; the information on this site; or information provided by its managers, partners or affiliates. You should seek independent financial advice and conduct your due diligence prior to acquiring any Quantive Alpha technology. Quantive Alpha is neither a registered investment advisor nor an investment advisory service and does not provide any recommendations to buy or sell particular financial products. 
Before engaging in any trading activities, you should understand the nature and extent of your rights and obligations and be aware of the risks involved. Don’t trade with money you can’t afford to lose. Your trading and investing decisions are entirely your own responsibility. All securities and financial product transactions involve risks. If Quantive Alpha provides hypothetical representations of what the technology has achieved in the past, this has been done with the greatest know-how, data and expert technology that is available, but still, Quantive Alpha cannot guarantee that these results have any likelihood whatsoever of being achieved in future. The past performance of any trading system or methodology is not necessarily indicative of future results.