A $16B hedge fund CIO gives an easy explanation of quantitative trading

Ryan Tolkin, the CIO of a $16B hedge fund Schonfeld group, helped us understand what quantitative trading actually is. Following is a transcript of the video.

Quantitative investing is an implementation methodology more than a strategy itself and so, I would consider the two different implementation methodologies, discretionary investing or quantitative investing. And within quantitative investing, there are multiple different strategies that people can actually deploy. One of them being risk parity, one of them being CTA and another being statistical arbitrage but when we talk about quantitative investing, we are using systematic processes to ultimately take the decision-making or emotion out of the process. And so, rather than relying on human decision-making or human emotions that dictate the process, we are allowing the science to actually make decisions for us. And so, often times, we hear about people who are running discretionary strategies who make not necessarily always the best decisions because they've allowed their emotion to get to them so by deploying quantitative strategies, we've taken that element out of the equation.