Quantitative analysts are financiers who use very specific methods to reach values and prices.
There is a calling for quantitative analysts working a variety of areas, including housing, investment and other areas of finance, so employees can come from other backgrounds as well as Finance and Mathematics including Engineering, Physics and Computing.
Quantitative analysts have two ways of reaching prices and values:
- Numerically – analysts design a system to accurately assess the value of assets, investments and shares. They work on the basis that there is only one true price and whilst this is true it is very difficult to ascertain being dependant on so many factors. This is extremely complicated though it is essential. All other jobs in the finance industry rely on these prices to be able to make decisions and investments.
- Statistically - they use a model to work out which stocks and shares are expensive and which are cheap. Depending on their findings fund managers can decide whether it will be a good or a bad investment for their clients.
Analysts are not merely number crunchers. Depending on their skills they can advise on:
- Strategy development
- Portfolio optimization
- Derivatives pricing
- Risk management
- Credit analysis