Investment Strategy
Quantitative Approach
We employ advanced quantitative methods, using algorithms and computer models to analyze extensive data, defining our investment strategies.
Transaction Types and Size
Our focus is on short-term trading in derivatives, stocks, and ETFs, employing algorithmic strategies to diversify across assets and timeframes.
Investment Pace and Holding Periods
Known for a rapid investment pace, we capitalize on short-term market movements, with holding periods generally not exceeding a few weeks, distinguishing us from traditional approaches.
Geographic and Industry Focus
Maintaining a global perspective, we diversify across industries and sectors without restrictions on regions or sectors. Our strategies encompass various futures, from stock indices to commodities.
Risk Management
Ensuring security is paramount to us. We achieve this through vigilant risk management, employing strategies like position stop loss and distributing asset weights through position sizing. Engaging in both long and short positions fosters market agnosticism and wide diversification across all types of securities.
Investment Process
1. Behavioral Analysis
We identify behavior patterns by examining historical occurrences and extrapolating them into future predictions. Our distinctive approach involves stringent criteria, requiring patterns with a proven two-decade history, numerous occurrences, and resilience across diverse market conditions. We apply this methodology to over 11,000 assets, spanning stocks, commodities, bonds, metals, energies, crops, and currencies.
What is a Behavior Pattern?
A behavior pattern is an identical response to an identical stimulus. In trading, patterns can be found in price movements, which repeat over the years and in different contexts.
2. Rigorous Validation
We aim to guarantee that presented results stem from genuine behavior, not chance. Our pattern validation mirrors an engineering approach, emphasizing meticulousness and detail akin to airplane or vaccine development. The process involves keen observation, statistical validation, and ensuring probabilistically valuable conclusions. Only post this exhaustive validation do we proceed with algorithm development.
Types of Patterns
Patterns can appear in asset price movements, market and industry volatility, and trends across various time frames. Cross-relationships between different assets and markets offer diverse possibilities. After finding a pattern, we empirically validate it over time to ensure results align with expectations. This validation enables us to accurately calculate the future profit potential and associated risk based on validated hypotheses.
3. Mathematical Strategy
Our strategy hinges on positive mathematical expectation. It’s not just about the frequency of success but also about maximizing profits compared to potential losses in each trade. This method allows us to know in advance possible gains and losses, enabling us to adjust position sizes for optimal returns and risk control.
What is Mathematical Expectation?
The mathematical expectation or expected value of a discrete random variable is the sum of the product of the probability of each event by the value of that event. That is, it weighs the probability of an event occurring and the results that such an occurrence can generate.
4. Algorithmic Strategies
We convert our hypotheses into precise rules known as algorithms. These rules, activated when specific conditions are met, guide our decisions. We incorporate risk management to address potential deviations from expected outcomes, defining a margin of error to measure the risk of loss. Each algorithm signifies a distinct strategy, and once programmed, relevant metrics are extracted.
What is an Algorithm?
A behavior pattern is an identical response to an identical stimulus. In trading, patterns can be found in price movements, which repeat over the years and in different contexts.
5. Portfolio
By consolidating numerous algorithms with positive mathematical expectations, we create an actively managed portfolio. Our goal is to tie profits to the combination of multiple uncorrelated systems, leveraging their potential across diverse scenarios. This approach minimizes systemic risk, fostering a capital curve marked by smooth and consistent growth over time.
6. Position Sizing
We strategically distribute portfolio risk, based on the historical behavior data of each asset. It allows us to equalize position sizes and prevent a single asset from shouldering the entire portfolio risk. This approach also contributes to a smoother capital curve, effectively moderating portfolio volatility.
7. Diversification
Our risk management involves thorough diversification of strategies and assets. Utilizing various behavior patterns with different logics, time frames, and directions, we manage portfolios containing numerous strategies simultaneously. Advanced technology enables us to mathematically calculate and pre-determine the impact of this diversification, ensuring a well-informed approach.
8. Decoupling
Enhancing risk control, our systems must exhibit zero correlation with the rest of the portfolio. Analyzing historical data series reveals correlations between assets, enabling the identification of patterns that do not respond similarly to stimuli, ensuring diversified responses.
Conclusion
At Emerge Funds Investments, our 100% quantitative approach, combined with applied engineering to trading, meticulous risk management, and automated operations, ensures unparalleled effectiveness. By leveraging advanced technology in research, modeling, and data analysis, we provide clients with a transparent edge. With more than 16 years of experience, we have consistently delivered net returns averaging over 23% annually, establishing ourselves as one of the world’s top-performing Hedge Funds.
Risk management
A clear advantage of our company is the active management of risk. To ensure security, we have formulated a range of different strategies for each portfolio. As an algorithmic hedge fund, every step of this process is executed and controlled by our systems, bypassing human psychology in every step we take.
Position Stop Loss
Position sizing
Bi-directionality
Diversification
Decorrelation
Quick and Seamless
1.
Open your
brokerage account
2.
Fund it
Fund your account with your chosen investment amount.
3.
Buy our portfolio
Instruct the broker to
purchase the portfolio.
And that’s it! You will have joined a proven way to get More Money for Your Future*
Follow the performance of your investment through the broker’s platform or directly on the Vienna Stock Exchange.
Do not hesitate to contact us if you need assistance. For existing broker accounts, we can help you check the availability of our portfolios.
*Note that past performance does not guarantee future results. This statement is not financial advice, and individual outcomes may vary. Make informed decisions based on your financial goals and consider consulting with a financial advisor for personalized advice.