{"id":4903,"date":"2019-10-01T16:45:11","date_gmt":"2019-10-01T14:45:11","guid":{"rendered":"https:\/\/quantpedia.com\/?page_id=4903"},"modified":"2023-10-26T12:14:26","modified_gmt":"2023-10-26T10:14:26","slug":"how-it-works","status":"publish","type":"page","link":"https:\/\/vvv.quantpedia.com\/es\/how-it-works\/","title":{"rendered":"How it works"},"content":{"rendered":"<div style=\"height:50px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div class=\"wp-block-group is-layout-flow wp-block-group-is-layout-flow\">\n<div class=\"wp-block-group is-layout-flow wp-block-group-is-layout-flow\">\n<p style=\"text-align: center;\"><a href=\"https:\/\/\\\/\\\/new-fmhwbzh6ghd9hede.swedencentral-01.azurewebsites.net\/how-it-works\/\"><img decoding=\"async\" class=\"alignnone wp-image-9814\" src=\"https:\/\/\\\/\\\/new-fmhwbzh6ghd9hede.swedencentral-01.azurewebsites.net\/wp-content\/uploads\/2020\/12\/how-it-works-300x61.png\" alt=\"\" width=\"155\" height=\"32\" srcset=\"https:\/\/vvv.quantpedia.com\/wp-content\/uploads\/2020\/12\/how-it-works-300x61.png 300w, https:\/\/vvv.quantpedia.com\/wp-content\/uploads\/2020\/12\/how-it-works.png 633w\" sizes=\"(max-width: 155px) 100vw, 155px\" \/><\/a>&nbsp; &nbsp; <a href=\"https:\/\/\\\/\\\/new-fmhwbzh6ghd9hede.swedencentral-01.azurewebsites.net\/how-it-works\/documentation\/\"><img decoding=\"async\" class=\"alignnone wp-image-9819\" src=\"https:\/\/\\\/\\\/new-fmhwbzh6ghd9hede.swedencentral-01.azurewebsites.net\/wp-content\/uploads\/2020\/12\/DOCUMENTATION-1-300x62.png\" alt=\"\" width=\"155\" height=\"32\" srcset=\"https:\/\/vvv.quantpedia.com\/wp-content\/uploads\/2020\/12\/DOCUMENTATION-1-300x62.png 300w, https:\/\/vvv.quantpedia.com\/wp-content\/uploads\/2020\/12\/DOCUMENTATION-1.png 637w\" sizes=\"(max-width: 155px) 100vw, 155px\" \/><\/a>&nbsp; &nbsp; <a href=\"https:\/\/\\\/\\\/new-fmhwbzh6ghd9hede.swedencentral-01.azurewebsites.net\/how-it-works\/quantpedia-premium\/\"><img decoding=\"async\" class=\"alignnone wp-image-9822\" src=\"https:\/\/\\\/\\\/new-fmhwbzh6ghd9hede.swedencentral-01.azurewebsites.net\/wp-content\/uploads\/2020\/12\/qp-premium-1-300x62.png\" alt=\"\" width=\"155\" height=\"32\" srcset=\"https:\/\/vvv.quantpedia.com\/wp-content\/uploads\/2020\/12\/qp-premium-1-300x62.png 300w, https:\/\/vvv.quantpedia.com\/wp-content\/uploads\/2020\/12\/qp-premium-1.png 637w\" sizes=\"(max-width: 155px) 100vw, 155px\" \/><\/a>&nbsp; &nbsp;&nbsp;<a href=\"https:\/\/\\\/\\\/new-fmhwbzh6ghd9hede.swedencentral-01.azurewebsites.net\/how-it-works\/quantpedia-pro\/\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-9823\" src=\"https:\/\/\\\/\\\/new-fmhwbzh6ghd9hede.swedencentral-01.azurewebsites.net\/wp-content\/uploads\/2020\/12\/QP-PRO-1-300x62.png\" alt=\"\" width=\"155\" height=\"32\" srcset=\"https:\/\/vvv.quantpedia.com\/wp-content\/uploads\/2020\/12\/QP-PRO-1-300x62.png 300w, https:\/\/vvv.quantpedia.com\/wp-content\/uploads\/2020\/12\/QP-PRO-1.png 637w\" sizes=\"(max-width: 155px) 100vw, 155px\" \/><\/a><\/p>\n<p><style>.grid-container.page-default{max-width: 50rem}<\/style><\/p>\n<\/div>\n\n\n\n<p style=\"text-align: center;\"><a href=\"https:\/\/\\\/\\\/new-fmhwbzh6ghd9hede.swedencentral-01.azurewebsites.net\/how-it-works\/quantpedia-pro-reports\/\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-9824\" src=\"https:\/\/\\\/\\\/new-fmhwbzh6ghd9hede.swedencentral-01.azurewebsites.net\/wp-content\/uploads\/2020\/12\/QP-REPORTS-300x62.png\" alt=\"\" width=\"155\" height=\"32\" srcset=\"https:\/\/vvv.quantpedia.com\/wp-content\/uploads\/2020\/12\/QP-REPORTS-300x62.png 300w, https:\/\/vvv.quantpedia.com\/wp-content\/uploads\/2020\/12\/QP-REPORTS.png 637w\" sizes=\"(max-width: 155px) 100vw, 155px\" \/><\/a> &nbsp; <a href=\"https:\/\/\\\/\\\/new-fmhwbzh6ghd9hede.swedencentral-01.azurewebsites.net\/how-it-works\/quantpedia-answers\/\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-20407\" src=\"https:\/\/\\\/\\\/new-fmhwbzh6ghd9hede.swedencentral-01.azurewebsites.net\/wp-content\/uploads\/2022\/09\/grey-1-300x62.png\" alt=\"\" width=\"155\" height=\"32\" srcset=\"https:\/\/vvv.quantpedia.com\/wp-content\/uploads\/2022\/09\/grey-1-300x62.png 300w, https:\/\/vvv.quantpedia.com\/wp-content\/uploads\/2022\/09\/grey-1.png 637w\" sizes=\"(max-width: 155px) 100vw, 155px\" \/><\/a>&nbsp; &nbsp; <a href=\"https:\/\/\\\/\\\/new-fmhwbzh6ghd9hede.swedencentral-01.azurewebsites.net\/how-it-works\/quantpedia-explains\/\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-15120\" src=\"https:\/\/\\\/\\\/new-fmhwbzh6ghd9hede.swedencentral-01.azurewebsites.net\/wp-content\/uploads\/2021\/05\/GRAY-300x62.png\" alt=\"\" width=\"155\" height=\"32\"><\/a> &nbsp; &nbsp;<a href=\"https:\/\/\\\/\\\/new-fmhwbzh6ghd9hede.swedencentral-01.azurewebsites.net\/how-it-works\/faq\/\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-9820\" src=\"https:\/\/\\\/\\\/new-fmhwbzh6ghd9hede.swedencentral-01.azurewebsites.net\/wp-content\/uploads\/2020\/12\/FAQ-1-300x62.png\" alt=\"\" width=\"155\" height=\"32\" srcset=\"https:\/\/vvv.quantpedia.com\/wp-content\/uploads\/2020\/12\/FAQ-1-300x62.png 300w, https:\/\/vvv.quantpedia.com\/wp-content\/uploads\/2020\/12\/FAQ-1.png 637w\" sizes=\"(max-width: 155px) 100vw, 155px\" \/><\/a><\/p>\n\n\n\n\n<\/div>\n\n\n\n<div style=\"text-align: center;\"><br><hr><\/div>\n<div>\n<p style=\"text-align: center;\"><span style=\"font-size: 14pt;\"><em>What&#8217;s our process? We use a great number of finance research resources all over the world, including research portals, financial journals, universities and conferences. We sift through these sources every day and search for new interesting articles and papers. By the end of each year, thousands of financial papers have been investigated in this way.<\/em><\/span><\/p>\n<\/div>\n\n\n\n<div style=\"height:26px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<center>\n<p><iframe title=\"Quantpedia - The Encyclopedia of Algorithmic and Quantitative Trading Strategies\" width=\"400\" height=\"225\" src=\"https:\/\/www.youtube.com\/embed\/Qgz-HtWfZTg?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" allowfullscreen><\/iframe><\/p>\n<\/center>\n\n\n\n<hr class=\"wp-block-separator has-css-opacity is-style-dots\"\/>\n\n\n\n<h4 class=\"wp-block-heading has-text-align-center\">Quantpedia has strict selection rules<\/h4>\n\n\n\n<p class=\"wp-block-image\" style=\"text-align: left;\"><img loading=\"lazy\" decoding=\"async\" class=\"alignleft\" src=\"https:\/\/\\\/\\\/new-fmhwbzh6ghd9hede.swedencentral-01.azurewebsites.net\/wp-content\/uploads\/2019\/09\/Quantpedia-has-strict-selection-rules.png\" alt=\"This image has an empty alt attribute; its file name is Quantpedia-has-strict-selection-rules.png\" width=\"85\" height=\"85\"><span style=\"font-size: 14pt;\">Each article is evaluated based on the strategy&#8217;s implementability, backtest length period and overall soundness. We check how well the strategy is explained (we automatically remove black-boxes) and if it has a clearly stated performance characteristic. We prefer research papers which also contain some type of risk characteristics (max. drawdown, volatility, etc.). Only a small percentage of strategies pass all of these selection criteria.<\/span><\/p>\n\n\n\n<div style=\"height:26px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h4 class=\"wp-block-heading has-text-align-center\">We extract trading rules in plain language<\/h4>\n\n\n\n<p class=\"wp-block-image\" style=\"text-align: left;\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-4913 alignleft\" src=\"https:\/\/\\\/\\\/new-fmhwbzh6ghd9hede.swedencentral-01.azurewebsites.net\/wp-content\/uploads\/2019\/09\/We-extract-trading-rules-in-plain-language.png\" alt=\"\" width=\"85\" height=\"85\"> <span style=\"font-size: 14pt;\">Selected&nbsp;strategies are then added into the existing <strong><a href=\"https:\/\/\\\/\\\/new-fmhwbzh6ghd9hede.swedencentral-01.azurewebsites.net\/screener\/\">Quantpedia&#8217;s structure<\/a><\/strong>. We extract trading rules in plain language, performance and risk characteristics and various descriptive characteristics (the instruments used for trading, markets traded, backtest period length, etc.). Each strategy is then categorized by several keywords, and database connections to similar strategies are created.<\/span><\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large is-resized\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/\\\/\\\/new-fmhwbzh6ghd9hede.swedencentral-01.azurewebsites.net\/wp-content\/uploads\/2020\/11\/FRAME-pic-PRE-HOW-IT-WORKS-1024x634.png\" alt=\"\" class=\"wp-image-8943\" width=\"466\" height=\"288\" srcset=\"https:\/\/vvv.quantpedia.com\/wp-content\/uploads\/2020\/11\/FRAME-pic-PRE-HOW-IT-WORKS-1024x634.png 1024w, https:\/\/vvv.quantpedia.com\/wp-content\/uploads\/2020\/11\/FRAME-pic-PRE-HOW-IT-WORKS-300x186.png 300w, https:\/\/vvv.quantpedia.com\/wp-content\/uploads\/2020\/11\/FRAME-pic-PRE-HOW-IT-WORKS.png 1156w\" sizes=\"(max-width: 466px) 100vw, 466px\" \/><\/figure>\n\n\n\n<div style=\"height:26px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h4 class=\"wp-block-heading has-text-align-center\">See out-of-sample implementation of selected strategies<\/h4>\n\n\n\n<p class=\"wp-block-image\" style=\"text-align: left;\"><strong><a href=\"https:\/\/\\\/\\\/new-fmhwbzh6ghd9hede.swedencentral-01.azurewebsites.net\/screener\/?FilterQuantConnect=With+QuantConnect+Code\"><img loading=\"lazy\" decoding=\"async\" class=\"alignleft\" src=\"https:\/\/\\\/\\\/new-fmhwbzh6ghd9hede.swedencentral-01.azurewebsites.net\/wp-content\/uploads\/2020\/06\/We-kextract-trading-rules-in-plain-language-1.png\" alt=\"This image has an empty alt attribute; its file name is We-kextract-trading-rules-in-plain-language-1.png\" width=\"85\" height=\"85\"><\/a><\/strong><span style=\"font-size: 14pt;\">The subset of Quantpedia&#8217;s strategies are implemented in QuantConnect&#8217;s framework and contains out-of-sample back-tests\/replications together with equity curves, trading statistics and source code so that our users can continue in the exploration. Or they can just check if out-of-sample performance matches the in-sample info from source research papers. <\/span><span style=\"font-size: 14pt;\"><strong><a href=\"https:\/\/\\\/\\\/new-fmhwbzh6ghd9hede.swedencentral-01.azurewebsites.net\/screener\/?FilterQuantConnect=With+QuantConnect+Code\">Check strategies <\/a><a href=\"https:\/\/\\\/\\\/new-fmhwbzh6ghd9hede.swedencentral-01.azurewebsites.net\/screener\/?FilterQuantConnect=With+QuantConnect+Code\">with QuantConnect charts \/ codes \/ statistics \u2192<\/a><a href=\"https:\/\/\\\/\\\/new-fmhwbzh6ghd9hede.swedencentral-01.azurewebsites.net\/screener\/?FilterQuantConnect=With+QuantConnect+Code\">\ud83d\udcc8<\/a><\/strong><\/span><\/p>\n\n\n\n<div style=\"height:26px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h4 class=\"wp-block-heading has-text-align-center\">Visit our Premium blog<\/h4>\n\n\n\n<p class=\"wp-block-image\" style=\"text-align: left;\"><img loading=\"lazy\" decoding=\"async\" class=\"alignleft\" src=\"https:\/\/\\\/\\\/new-fmhwbzh6ghd9hede.swedencentral-01.azurewebsites.net\/wp-content\/uploads\/2019\/09\/Visit-our-blog.png\" alt=\"This image has an empty alt attribute; its file name is Visit-our-blog.png\" width=\"85\" height=\"85\"><span style=\"font-size: 14pt;\">A new blog post for our <strong><a href=\"https:\/\/\\\/\\\/new-fmhwbzh6ghd9hede.swedencentral-01.azurewebsites.net\/pricing\/\">Premium users<\/a><\/strong> is created once a new strategy is added into Quantpedia. Members can see all of a strategy&#8217;s characteristics and use the <a href=\"https:\/\/\\\/\\\/new-fmhwbzh6ghd9hede.swedencentral-01.azurewebsites.net\/screener\/\"><strong>Screener<\/strong><\/a> and <a href=\"https:\/\/\\\/\\\/new-fmhwbzh6ghd9hede.swedencentral-01.azurewebsites.net\/charts\/\"><strong>visualization tools<\/strong><\/a> to compare it to other Quantpedia strategies. All new academic research papers related to already existing Quantpedia Premium strategies are also published on <a href=\"https:\/\/\\\/\\\/new-fmhwbzh6ghd9hede.swedencentral-01.azurewebsites.net\/blog\/\"><strong>our blog<\/strong><\/a>, but those blog posts are visible only for Premium users. Occasionally, we find academic papers related to common quantitative trading strategies. Such papers are usually described on <a href=\"https:\/\/\\\/\\\/new-fmhwbzh6ghd9hede.swedencentral-01.azurewebsites.net\/blog\/\"><strong>our free blog<\/strong><\/a>.<\/span><\/p>\n\n\n\n<div style=\"height:26px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h4 class=\"wp-block-heading has-text-align-center\">Why would somebody publish working strategy?<\/h4>\n\n\n\n<p class=\"wp-block-image\" style=\"text-align: left;\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-7304  alignleft\" src=\"https:\/\/\\\/\\\/new-fmhwbzh6ghd9hede.swedencentral-01.azurewebsites.net\/wp-content\/uploads\/2020\/06\/publish-1.png\" alt=\"\" width=\"85\" height=\"85\" \/><span style=\"font-size: 14pt;\">If you are an academic, then it\u2019s simple. A lot of the academics are curious, and they are doing research in the <a href=\"\/es\/_wp_link_placeholder\/\" data-wplink-edit=\"true\">pursuit of knowledge<\/a>. They want to show they have bright ideas and they want to let other people know about it. And it\u2019s also a way to climb academic career ladder. And it\u2019s a possibility to start a side business as a consultant for some hedge fund or start a fund on their own. Asset management companies publish working trading strategies because they want to raise more assets and gain the trust of pension and sovereign funds and family offices.<\/span><\/p>\n\n\n\n<center>\n<p><iframe title=\"Quantpedia - Once published, will strategy stop working?\" width=\"400\" height=\"225\" src=\"https:\/\/www.youtube.com\/embed\/-bURqkuCVBA?start=4&#038;feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" allowfullscreen><\/iframe><\/p>\n<\/center>\n\n\n\n<div style=\"height:26px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h4 class=\"wp-block-heading has-text-align-center\">Once published, will strategy stop working?<\/h4>\n\n\n\n<p class=\"wp-block-image\" style=\"text-align: left;\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-7540 alignleft\" src=\"https:\/\/\\\/\\\/new-fmhwbzh6ghd9hede.swedencentral-01.azurewebsites.net\/wp-content\/uploads\/2020\/07\/curve-up.png\" alt=\"\" width=\"85\" height=\"85\"><span style=\"font-size: 14pt;\"><span style=\"color: inherit;\">There are <strong><a href=\"https:\/\/\\\/\\\/new-fmhwbzh6ghd9hede.swedencentral-01.azurewebsites.net\/how-do-investment-strategies-perform-after-publication\/\">multiple research papers<\/a><\/strong> which answers this common question. No, strategy usually doesn\u2019t vanish. It\u2019s less profitable than in the past, and the return-to-risk ratio is&nbsp;<\/span><span style=\"color: inherit;\">usually lower. But the strategy can still easily be part of the diversified multi-strategy portfolio.&nbsp;It\u2019s not easy to arbitrage market anomalies. Most of the anomalies have time-varying return so fair part of the return is preserved as arbitrage is not risk-free. Therefore there will never be enough capital to&nbsp;<\/span><span style=\"color: inherit;\">arbitrage all return away.<\/span><\/span><\/p>\n\n\n\n<div style=\"height:26px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h4 class=\"wp-block-heading has-text-align-center\">Use Quantpedia Pro to gain deeper insight<\/h4>\n\n\n\n<p class=\"wp-block-image\" style=\"text-align: left;\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-12098  alignleft\" src=\"https:\/\/\\\/\\\/new-fmhwbzh6ghd9hede.swedencentral-01.azurewebsites.net\/wp-content\/uploads\/2021\/03\/HOW-IT-WORKS-IKONKA-300x297.png\" alt=\"\" width=\"85\" height=\"84\" srcset=\"https:\/\/vvv.quantpedia.com\/wp-content\/uploads\/2021\/03\/HOW-IT-WORKS-IKONKA-300x297.png 300w, https:\/\/vvv.quantpedia.com\/wp-content\/uploads\/2021\/03\/HOW-IT-WORKS-IKONKA-150x150.png 150w, https:\/\/vvv.quantpedia.com\/wp-content\/uploads\/2021\/03\/HOW-IT-WORKS-IKONKA.png 319w\" sizes=\"(max-width: 85px) 100vw, 85px\" \/><span style=\"font-size: 14pt;\"><strong><a href=\"https:\/\/\\\/\\\/new-fmhwbzh6ghd9hede.swedencentral-01.azurewebsites.net\/how-it-works\/quantpedia-pro\/\">Quantpedia Pro<\/a><\/strong> is the analytical platform that will help you to explore <strong><a href=\"https:\/\/\\\/\\\/new-fmhwbzh6ghd9hede.swedencentral-01.azurewebsites.net\/how-it-works\/quantpedia-premium\/\">Quantpedia Premium<\/a><\/strong> model strategies and do preliminary portfolio testing more efficiently. Utilize its extensive <strong><a href=\"https:\/\/\\\/\\\/new-fmhwbzh6ghd9hede.swedencentral-01.azurewebsites.net\/how-it-works\/quantpedia-pro-reports\/\">calculation and reporting capabilities<\/a><\/strong> &#8211; 200+ charts and tables, factor regression analysis, risk scenarios, seasonality analysis, tests of alternative weighting schemes, correlation analysis etc.<\/span><\/p>","protected":false},"excerpt":{"rendered":"<p>Quantpedia has strict selection rules We extract trading rules in plain language See out-of-sample implementation of selected strategies Visit our Premium blog Why would somebody publish working strategy? Once published, will strategy stop working? Use Quantpedia Pro to gain deeper insight<\/p>","protected":false},"author":2,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"class_list":["post-4903","page","type-page","status-publish","hentry"],"_links":{"self":[{"href":"https:\/\/vvv.quantpedia.com\/es\/wp-json\/wp\/v2\/pages\/4903","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vvv.quantpedia.com\/es\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/vvv.quantpedia.com\/es\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/vvv.quantpedia.com\/es\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/vvv.quantpedia.com\/es\/wp-json\/wp\/v2\/comments?post=4903"}],"version-history":[{"count":0,"href":"https:\/\/vvv.quantpedia.com\/es\/wp-json\/wp\/v2\/pages\/4903\/revisions"}],"wp:attachment":[{"href":"https:\/\/vvv.quantpedia.com\/es\/wp-json\/wp\/v2\/media?parent=4903"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}