Search
Close this search box.
Search
Close this search box.

Are You An “Associational Quant” Or A “Causal Quant”?

Are You An “Associational Quant” Or A “Causal Quant”?

Education / Ai & Machine Learning

The answer depends on the type of empirical evidence that you produce to support your findings.

Causation is a special type of association (the type that flows through a causal path). Causal quants have learned the techniques needed to build and manipulate causal graphs.

Which allow them to differentiate causation from mere association.

For further reading on the dangers of association-based investing see our piece: What Happened To LTCM?

Causal quants develop more robust and investment-efficient models.

Which are less susceptible to Type-A and Type-B spuriosity, and are more resilient to black swan events.

If you wish to become a causal quant, you can start your journey today:

1) Read “Causal Factor Investing.” It analyzes the current state of causal confusion in the factor investing literature, and proposes solutions with the potential to transform factor investing into a truly scientific discipline. The expanded and revised version is here: HERE!

2) Register for the January 12th seminar by Professor Marcos Lopez de Prado: HERE!

Please note, the number of seminar attendees is limited to 1,000. And there are only ~100 spots left, so please REGISTER soon!

Do You Need To Backtest A Trading Strategy?

Causal Factor Investing: Can Factor Investing Become Scientific?

Are you an “associational quant” or a “causal quant”?

Who is Professor Marcos Lopez de Prado?

Over the past 20 years, Marcos pursued three careers simultaneously, as (a) an investment manager, (b) a university professor, and (c) a researcher at a leading U.S. National laboratory. Through this combination of backgrounds, Marcos helped modernize finance by advancing the adoption of machine learning and supercomputing, furthermore by developing statistical tests that identify false investment strategies (false positives). In recognition of this work, Marcos received various scientific awards, including the National Award for Academic Excellence of 1999 by the Kingdom of Spain, furthermore, the Quant of the Year Award of 2019 by The Journal of Portfolio Management, and the Buy-Side Quant of the Year Award of 2021 by Risk.

In conclusion, Marcos managed multibillion-dollar funds. Produced numerous innovations resulting in 13 patents. (11 of which have become bought by various firms). In addition, published five textbooks used in Ivy League university programs. As well as over 50 peer-reviewed publications in academic journals. Since 2017, Marcos has ranked as the most-read author in economics (SSRN). Lastly, in 2019, the U.S. Congress invited Marcos to offer testimony on AI policy, and the impact of automation in the financial sector.