THE EDGETECH DIFFERENCE
EdgeTech has no preconceived notions or subjective opinions as to how we feel the market should or will behave. Security prices are black and white and so is our mathematics. In this way, we are not led by sentiment- as so much of the market is these days- but by a straight forward technology-based assessment of prices and their near-term trends.
Where Quantitative Investing Can Falter
Too much data
There is so much information about the world of investing available at our fingertips. Sometimes quantitative models use tens or hundreds of factors to make recommendations which can lead to crossed signals, confusion, or false flags. EdgeTech cares about price and price alone. It is the bottom of the funnel for every bit of information in the market.
All in or all out
Quantitative models can sometimes be structured to make macro bets. Putting all of your chips on black works if you can be right all the time but no one is. EdgeTech’s unique model design helps to hedge against this type of decision making.
Selling winners to buy losers
When an allocated portfolio is “rebalanced”, it’s taking weight from assets that have done better than others to give to those that have underperformed. EdgeTech lets our winners run as long as it still makes sense for the portfolio. Why get off a winning horse?
Some models like to look at long lengths of data to make determinations about right now. This can make models lethargic and slow to react. EdgeTech is not a day trading process but we certainly understand the value of timely reaction.
ACTIONABLE DECISION MAKING
The mathematical technology isn’t meant to be predictive or create what-if scenarios, it’s there to observe what is occurring in the market and react with actionable decisions as a result. We recognize clients have different needs and preferences to how their money is managed which is why we offer two different options for observation- Alpha mode and Beta mode.
EdgeTech’s Alpha models are our tactical investment management solution focused on maximizing total return within an acceptable risk tolerance. Within the portfolio, a range of assets need to compete to earn a spot in the allocation.
Each asset receives a mathematical score based off of its price performance. If an investment is performing better, the Alpha model is responsive and will recommend a change. If no investment looks appealing, cash is always an option.
EdgeTech’s Beta models are our strategic investment management solution focused on targeting a certain level of market risk based upon a stated risk tolerance. Within the portfolio, each investment is given a volatility score based off of its price performance.
This volatility score is then compared to the designated target and then allocations are quantitatively adjusted on a perodic basis to help maintain appropriate risk exposure regardless of the market environment.