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Quantitative Analysis

What is 'Quantitative Analysis'

Quantitative analysis refers to economic, business or financial analysis that aims to understand or predict behavior or events through the use of mathematical measurements and calculations, statistical modeling and research. Quantitative analysts aim to represent a given reality in terms of a numerical value. Quantitative analysis is employed for a number of reasons, including measurement, performance evaluation or valuation of a financial instrument, and predicting real world events such as changes in a country's gross domestic product (GDP) growth rate.

Explaining 'Quantitative Analysis'

In general terms, quantitative analysis can best be understood as simply a way of measuring or evaluating things through the examination of mathematical values of variables. The primary advantage of quantitative analysis is that it involves studying precise, definitive values that can easily be compared with each other, such as a company's year-over-year revenues or earnings. In the financial world, analysts who rely strictly on quantitative analysis are frequently referred to as "quants" or "quant jockeys."

Quantitative Vs. Qualitative Analysis

While quantitative analysis serves as a very useful evaluation tool by itself, it is often combined with the complementary research and evaluation tool of qualitative analysis. For example, it is easy for a company to use quantitative analysis to evaluate figures such as sales revenue, profit margins or return on assets (ROA), but the company may also wish to evaluate information that is not easily reducible to mathematical values, such as its brand reputation or internal employee morale.


Further Reading


Default risk on FHA‐insured home mortgages as a function of the terms of financing: a quantitative analysis
onlinelibrary.wiley.com [PDF]
… Most of these techniques are based on the quantitative spectral approach using a “stationary signals” assumption applied to real situations … Wavelet methods for time series analysis. Cambridge University Press … Wavelets in Economics and Finance: Past and Future …

The super-rich in global perspective: a quantitative analysis of the Forbes list of billionairesThe super-rich in global perspective: a quantitative analysis of the Forbes list of billionaires
www.tandfonline.com [PDF]
… Most of these techniques are based on the quantitative spectral approach using a “stationary signals” assumption applied to real situations … Wavelet methods for time series analysis. Cambridge University Press … Wavelets in Economics and Finance: Past and Future …

Geometric Brownian motion and structural breaks in oil prices: a quantitative analysisGeometric Brownian motion and structural breaks in oil prices: a quantitative analysis
www.sciencedirect.com [PDF]
… Most of these techniques are based on the quantitative spectral approach using a “stationary signals” assumption applied to real situations … Wavelet methods for time series analysis. Cambridge University Press … Wavelets in Economics and Finance: Past and Future …

Corporate social performance and innovation with high social benefits: A quantitative analysisCorporate social performance and innovation with high social benefits: A quantitative analysis
link.springer.com [PDF]
… Most of these techniques are based on the quantitative spectral approach using a “stationary signals” assumption applied to real situations … Wavelet methods for time series analysis. Cambridge University Press … Wavelets in Economics and Finance: Past and Future …

A quantitative analysis of inflation as a tax on the underground economyA quantitative analysis of inflation as a tax on the underground economy
www.sciencedirect.com [PDF]
… Most of these techniques are based on the quantitative spectral approach using a “stationary signals” assumption applied to real situations … Wavelet methods for time series analysis. Cambridge University Press … Wavelets in Economics and Finance: Past and Future …

Bank capital requirements: A quantitative analysisBank capital requirements: A quantitative analysis
papers.ssrn.com [PDF]
… Most of these techniques are based on the quantitative spectral approach using a “stationary signals” assumption applied to real situations … Wavelet methods for time series analysis. Cambridge University Press … Wavelets in Economics and Finance: Past and Future …



Q&A About Quantitative Analysis


How does quantitative analysis help you evaluate a financial instrument?

Quantitative analysts aim to represent a given reality in terms of a numerical value. This helps them evaluate a financial instrument.

What is quantitative analysis?

Quantitative analysis refers to economic, business or financial analysis that aims to understand or predict behavior or events through the use of mathematical measurements and calculations, statistical modeling and research.

Can qualitative analysis be combined with quantitative analysis?

Yes, it can. Qualitative analysts are often paired with quantitative analysts for more comprehensive evaluations.

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