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Quantopian Strategic Pivot

Quantopian’s mission is to level the playing field in quant finance. We believe anyone, anywhere, should be able to compete to find market inefficiencies.

I’m writing today to announce a strategic pivot that better serves our mission. Through 2019, in the face of challenging market conditions, many equity quant themes underperformed as valuations continued to rise. The key learning after running our market-neutral strategy for two years is very clear: a more diverse set of investment objectives will better unleash your potential. To do so, we will shut down our market-neutral strategy and pivot our strategy in two ways:

  1. By building bespoke strategies for asset owners like the US corporate pension that is hosting our first third-party challenge.
  2. By researching and defining numerous products that span from long-only to market-neutral, cover many geographies, and operate at a wide range of turnovers.

Both of these initiatives translate into more opportunities for Quantopian’s business to grow and for you to receive royalties for your intellectual property (IP). We refer to these initiatives in combination as our “on-demand” strategy.

This change reflects Quantopian’s continuing evolution based on our learnings as a business and our belief that this pivot is the smartest use of our resources. On-demand is where the best opportunities for Quantopian and our community lie.

Many of you have commented on how constrained the contest and the selection criteria are. Crowd-sourcing alpha offers a limited number of allocations and ones that fit only strict criteria given that it requires limiting risk exposures and adhering to other constraints. In contrast, we've found that there are many interesting strategies that you have created that fall outside these constraints — now we're exploring how and where they best perform.

On-demand challenges provide a broader range of complex problems for you to solve and offer a wider range of opportunities to get your IP licensed. As a result, on-demand gives you more opportunities to have your work recognized and rewarded. A large US pension fund is hosting our most recent challenge and we are actively pursuing other partnerships.

We have the right data, operators, signal selection, and combination methods to execute our plan for on-demand. But most importantly, we have you, our community members whose work we see as on par with that of researchers in the best firms in the world. Your submissions to our challenges have been high quality, diverse and demonstrate your ability to research complex problems in the industry quickly and diligently. Third-party investors find this, the 12 million backtests and 6 million algos already produced by you on Quantopian, extremely interesting.

The potential partners we’ve been speaking to rave about the talent depth within the community. Your commitment to our mission, trust in our vision, and the countless hours you spend researching and developing your ideas are what make Quantopian unique and on-demand possible.

The contest will remain running as usual and top performers will continue to receive daily prizes. We’ve found that that the contest is a great tool for identifying engaged community members and instilling essential concepts that continue to come up in quant finance. We do not anticipate that workflow and goals for activity will change much. We want you to continue researching your ideas and submit them to our challenges.

In the short term, our pivot allows us to highlight the crowd's ability to perform world-class research for some of the largest asset managers in the world through third-party challenges. Longer-term, our pivot allows us to identify the criteria for what the right future strategy entails.

Our strength comes from the diversity of our community and we are committed to bringing our members the best growth opportunities we can find — we believe on-demand provides them. We are staying true to our original purpose: leveling the playing field for everyone interested in quant finance.

We are extremely excited about this and we look forward to continuing to work with you as we take Quantopian and the community forward. The team at Quantopian is tirelessly pursuing on-demand leads and we’re excited to update you on developments soon.

fawce

Disclaimer

The material on this website is provided for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation or endorsement for any security or strategy, nor does it constitute an offer to provide investment advisory services by Quantopian. In addition, the material offers no opinion with respect to the suitability of any security or specific investment. No information contained herein should be regarded as a suggestion to engage in or refrain from any investment-related course of action as none of Quantopian nor any of its affiliates is undertaking to provide investment advice, act as an adviser to any plan or entity subject to the Employee Retirement Income Security Act of 1974, as amended, individual retirement account or individual retirement annuity, or give advice in a fiduciary capacity with respect to the materials presented herein. If you are an individual retirement or other investor, contact your financial advisor or other fiduciary unrelated to Quantopian about whether any given investment idea, strategy, product or service described herein may be appropriate for your circumstances. All investments involve risk, including loss of principal. Quantopian makes no guarantees as to the accuracy or completeness of the views expressed in the website. The views are subject to change, and may have become unreliable for various reasons, including changes in market conditions or economic circumstances.

3 responses

Thanks,
so to sum things up a bit :
1) expect more challanges like the last ones ( Japan, Pension Fund, Insider Transactions) etc.
2) contest rules might change going forward with less restrictions on the market-neutral aspect

I like the new focus. Narrowly-defined challenges are also more interesting.

I'd like to raise a point about Quantopian infrastructure - it seems it is getting a bit old. Backtests take a long time. I would even pay a small fee (like $10/mo) to be on dedicated infrastructure that would allow me faster iterations.

Another point is multi-parameter optimizer - it would be great to have this feature built into the backtester in some way.

And finally, two very small asks to make algo development easier: expose more columns in Backtest list (like sharpe, max dd etc) so backtests are easier to find. And second one, allow the code from backtest to be easilly copied (seems simple but it doesnt work now).

Sorry to piggyback on the thread for somewhat unrelated feedback.

Alpha signals were too watered down at $10M in the contest due to too many stocks required to consume that much money.
Those suggestions above reminded me: Let users drive development and this forum is not sufficient for that, Q needs a page where ideas can be written and voted on by others.