Rocket Science? Meet Quant Trading.
<p>To those outside of finance, what quantitative traders and hedge funds do may seem like rocket science. However, although what really goes on behind the scenes may not be too complex, sometimes, it really <strong>is </strong>rocket science.</p>
<p>So, today, we’ll be taking a dive into how Wall Street quants apply actual rocket science concepts to real-world trading.</p>
<h2>Signals Are Everything</h2>
<p>While Aerospace Engineering (rocket science) and Finance may not have much in common, the biggest similarity is that they both use <strong>tons </strong>of data. In both fields, most of this data is in the form of a time-series, where the data points are observations across time:</p>
<p><img alt="" src="https://miro.medium.com/v2/resize:fit:700/1*h0CiI2lbb7D81t_H-udsfQ.png" style="height:453px; width:700px" /></p>
<p><a href="https://www.researchgate.net/publication/293099115_Interconnecting_the_mechanical_engineering_curriculum_through_an_integrated_multicourse_model_rocketry_project" rel="noopener ugc nofollow" target="_blank">Source</a></p>
<p><img alt="" src="https://miro.medium.com/v2/resize:fit:700/1*suloDz02J5ssGdoJ0nRX0A.jpeg" style="height:388px; width:700px" /></p>
<p><a href="https://www.analyticsvidhya.com/blog/2020/11/stock-market-price-trend-prediction-using-time-series-forecasting/" rel="noopener ugc nofollow" target="_blank">Source</a></p>
<p>In both fields, the data is used to generate insights, but most importantly, it’s used to <strong>influence decision making</strong>. Making data-driven decisions are especially important when it comes to rockets, as errors in performance can lead to deadly and costly mistakes.</p>
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