Adam Butler - Questioning the Quant Orthodoxy (S5E13)
Flirting with Models
00:00
The Threat of Risk Management
In many ways, you are leaning more heavily into the historical distribution of realized returns. One pushback on that approach would be it opens you up to potential outliers or conditions that the model hasn't seen before. How do you think about that and managing that sort of risk? We can conjure a wide variety of different instantaneous shocks that the market participants in the markets themselves and other economic factors can't give you any guidance on over forecast horizons.
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