In the fast-paced world of cryptocurrencies, understanding market sentiment can provide a crucial edge. As investors and traders seek to anticipate the volatile movements of Bitcoin, innovative approaches are continuously explored. One such method involves leveraging Google Trends data to gauge public interest and sentiment towards Bitcoin. This approach assumes that search volume on Google not only reflects current interest but can also serve as a predictive tool for future price movements. This blog post delves into the intricacies of using Google Trends as a sentiment predictor, exploring i ..read more

As an old investing adage goes, “Everybody’s a genius in a bull market.” It is easy to fall victim to the Dunning-Kruger effect, where attribution bias makes us mistake our luck for abilities. When the business cycles change, there are great problems with precise stock price predictability. And this is not the only problem for humans, who are baffled by many mental heuristics. Machine learning algorithms experience similar problems, too. What is happening, and why is it so? A new paper by Wang, Fu, and Fan gives an explanation and proposes some remedies ... The post Impact of Bu ..read more

We mentioned multiple times that we at Quantpedia love historical analysis that spans over a long period of time as it offers a unique glimpse into the different macro environments and periods of political and economic instabilities. These long-term studies help a lot in risk management, and they also help investors set the right expectations about the range of outcomes in the future. Historical analysis of equity and fixed-income markets is not rare, but currency markets are less explored. Therefore, we are happy to investigate a recent paper by Joseph Chen that analyzes carry, momentum, and ..read more

Hello all, What have we accomplished in the last month? – A new Pragmatic Asset Allocation report – A reminder for Quantpedia Awards 2024 competition with a $15.000 prize pool - MesoSim discount announcement – 11 new Quantpedia Premium strategies have been added to our database – 8 new related research papers have been included in existing Premium strategies during the last month – Additionally, we have produced 9 new backtests written in QuantConnect code – 5 new blog posts that you may find interesting have been published on our Quantpedia blog in the previous month The post Quantpedia in Ma ..read more

Seven new strategies have been added. Five new related research papers have been included into existing strategy reviews and two short free blog posts have been published during last few weeks. Plus, five trading strategies have been backtested in QuantConnect in the previous two weeks. The post Quantpedia Premium Update – April 8th appeared first on QuantPedia ..read more

There was a time in history when researchers believed that we, as a human species, act ultimately reasonably and rationally (for example, when dealing with financial matters). What arrived with the advent of Animal spirits (Keynes) and later Behavioral Finance pioneers such as Kahneman and Tversky was the realization that it is different from that. We often do not do what is in our best interest; quite the contrary. These emotions are hardly reconcilable with normal reasoning but result in market anomalies. Researchers love to find causes and reasons and link behavioral ano ..read more

In the rapidly evolving landscape of cryptocurrency markets, understanding the underlying dynamics that drive price movements and investor sentiment can be a matter of survival. However, there are myriad facets of trading reality, and the only thing that we can do is to slowly understand them one after another, one step at a time. This article picks one corner of the cryptocurrency market and sheds a little light on it. We have already written a few times about the importance of the introduction of Bitcoin futures and their impact on the Bitcoin price. Therefore, in this article, we will speci ..read more

Four new strategies have been added. Three new related research papers have been included into existing strategy reviews and three short free blog posts have been published during last few weeks. Plus, four trading strategies have been backtested in QuantConnect in the previous two weeks. The post Quantpedia Premium Update – March 20th appeared first on QuantPedia ..read more

The degree of stock market efficiency is a fundamental question of finance with considerable implications for the efficiency of capital allocation and, hence, the real economy. Return predictability is a cornerstone that allows investors to estimate their returns with ranging precision. Some anomalies allow one to exploit loopholes in global markets and capture substantial alpha, which violates the Efficient Market Hypothesis (EMH). However, whether this alpha arrives from risk premia or its source is mispricing is still puzzling academics around the globe, and they wrap their head around solv ..read more

Alternative investment assets (also such as rare vintage and collectible items, expensive old high-quality alcohol, discontinued fashion, etc.) are a hit among wealthy investors, even though it is not easy to obtain direct or indirect exposure to diversified art investment(s) in a traditional finance kind of way. However, alternative assets are helpful in portfolio diversification as they last (if stored properly), usually appreciate in value (but sometimes not very predictably), and have a low correlation to traditional assets like stocks, real estate, gold, or fixed-incom ..read more