This environment has led to abyssal losses for some concentrated hedge fund managers, to forced deleveraging of some market participants, and a large reduction of exposure by Long/Short Equity funds globally.In an environment of historically high economic uncertainty and Equity valuations not seen since the 90’s Tech Bubble, we are probably witnessing close to a capitulation by the market on the strategy of short selling. Recent risk-on thanks to the vaccine and the January turmoil have led to historically low levels of Short Interest in the US and globally, after high Short Interest names had an historical out-performance.
The year 2020 has been the most challenging one we have experienced in terms of systematic stock selection since we started RAM AI in 2007. The difficulty in systematic stock selection lies in outliers, in points never witnessed in the distribution before. Some of our alpha engines behave differently in these circumstances than what we have ever witnessed, analyzed (in the last 30 years of data available to us) or predicted. 2020 was marred by these outliers. The market moves on the surge of a global coronavirus pandemic in March, the central banks’ led rotation in June or the November vaccine-led risk-on have all been a large number of standard deviations away from the norm or from anything the markets have witnessed in the three decades.
RAM AI wishes you a Happy Holiday Season and a Prosperous New Year!
RAM AI launches the RAM Diversified Alpha Strategy (UCITS), which will seek to deploy a robust and stable systematic investment process to exploit volatility and dispersion within a broadly diversified global asset allocation, with the intention of offering asymmetric returns that have low correlation to global markets.
Discover our new Academic Paper "A Deep Learning Framework for Climate Responsible Investment".
Nicolas Jamet and Tian Guo speak with Camilla Giannoni in the latest interview with Citywire Switzerland.
We harness opportunity through collaboration. In a diverse world of markets and asset classes. Equity and fixed income. Systematic and Tactical. Disciplined and personal. Our fusion of inquiring minds and entrepreneurial spirit works in sync with technology at the leading edge of innovation. Proudly independent, and consistently focused on returns, we work nimbly and responsively to do one thing – deliver you the highest performance.
