What is used quantitative finance?
Applied quantitative finance is a way to set trends that are used to decide whether to invest the risk. This economic industry works with real numbers that come from real companies to decide which will have a direct impact on profits and investments. Other forms of finance are often separated from hard numbers or a direct impact on the decision. As a result, the information and decisions used, applied by quantitative financial economists, are often a very high priority for the company's investment area.
The world of the economy is divided in many ways. One of the most basic divisions is among quantitative and qualitative. Quantitative concerns the use of hard numbers such as points of focus analysis, such as income of the company for a specific period or the number of specific products sold in December. Qualitative is the exact opposite; It focuses on intangible and examines how they affect the situation as a whole. For example, an acvitative factor would beThe level of workers' happiness and how it affects productivity.
Another of the main divisions is between the applied economy and the pure economy. Pure studies focus on how money, trading systems and industry affect each other and the world around them. These studies rarely use data about the real world and do not come with definitive answers to existing situations. The applied economy works directly with real data and look at things that are happening in the world. These studies focus on profitability, long -term trends and market cycles to predict what will happen to the market in the future.
From the above divisions, the basic importance of the applied quantitative financing is clear; It is a method of using specific numbers to look at the situation in the real world. This type of economy is mainly engaged in two areas: calculation of prices and profitability. These twenties form a huge part of investment, which knowsIt is used that for most investment transactions, applied quantitative finances are used in some way.
derivative prices are generally simpler of the main areas of applied quantitative finances. A derivative is an asset that obtains its value from another asset. For example, the possibility of storage has no value in itself; Its entire value is connected to the share to which you will listen in this option. In this case, the applied quantitative finances are used to display the basic value of the underlying asset and decide how this value changes over time. The value is then assigned to a derivative that represents a view of what happens in the future.
profitability is a bit more complicated. In this case, the applied quantitative finances attempts to see long -term and short -term trends with both the asset studied and the market itself. He can then make a decision based on past trends that predict the value of the asset in the future. This value is comparedAt the current value to determine whether the asset is paid to invest in.