Why Position Level Analysis Matters
Position-level analysis doesn’t get enough attention. It helps get to the why not just the what. In this post we unpack key methods to improving prediction.
Active management is at an inflection point
While passive management simplifies many aspects of investing, alpha generation through active management is an imperative for investors trying to meet their future obligations. After a market cycle of disappointment from active management, the question for these investors is how to capture alpha in a better way.
At Epsilon, we deliver fundamental stock-selection alpha through a systematic process. We create investment strategies from big data signals generated by the entire active management community. We believe this approach is uniquely suited to solve the active/passive dilemma. It provides active orientation with the goal of consistently delivering top-quartile long equity alpha. It is married with lower fees, full transparency, and daily liquidity. Truly, the intersection of active and passive.
Our Objectives
While our aim is to deliver consistent alpha to our clients, we believe that short-term performance is at the mercy of randomness. Long-term results comes from process and a disciplined adherence to foundational objectives:
Growing Your Capital
We use rules-based approaches to avoid behavioral biases.
“The first principle is that you must not fool yourself and you are the easiest person to fool.” – Richard Feynman
A Truly Client-First Approach
Through transparency, liquidity, and low fees, we drive alignment of interest.
“We’ve had three big ideas at Amazon that we’ve stuck with for 18 years, and they’re the reason we’re successful: Put the customer first. Invent. And be patient.” – Jeff Bezos
A Truly Client-First Approach
Through transparency, liquidity, and low fees, we drive alignment of interest.
“We’ve had three big ideas at Amazon that we’ve stuck with for 18 years, and they’re the reason we’re successful: Put the customer first. Invent. And be patient.” – Jeff Bezos
Reducing the Randomness of Outcomes
We apply the scientific method to the investment process to deliver investment consistency.
“The plural of anecdote is not data.” – Marc Bekoff
The Epsilon Flywheel
So how do we deliver passive characteristics with active alpha? By removing the expensive pursuit of fundamental security analysis. We make security selection decisions through big data analysis of regulatory filings. In doing so, we tap into the collective wisdom of all active managers to distill their cumulative fundamental research. This provides tremendous cost advantages for our products, which we can pass on to our investors. Our focus can then be on meticulous portfolio construction and process improvement, the key ingredients in delivering consistent alpha.
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