How China Tried to Fix the Stock Market---and Broke the Quants

China’s Biggest Quant Funds Overlooked a Crucial Factor in Their Models #

China’s largest quant funds have consistently outperformed the market, but they failed to incorporate a key factor into their models: the government. By neglecting the government’s influence on the market, these funds missed out on crucial insights that could have impacted their strategies. The Chinese government can have significant sway over market movements through policies, regulations, and interventions. Recognizing and accounting for these factors can help improve the accuracy and effectiveness of quant models in the Chinese market.

Summary: #

China’s biggest quant funds have consistently outperformed the market, but they failed to consider the government as a crucial factor in their models. By overlooking the government’s influence on the market, these funds missed valuable insights that could have impacted their strategies. The Chinese government holds significant power over market movements through its policies and interventions. Incorporating these factors into quant models can enhance their accuracy and effectiveness in the Chinese market.