Directional Quantitative Strategies Beyond Relative-Value Trading
Summary
The discussion distinguishes directional strategies, which take a view on an asset’s future movement, from relative-value approaches that trade multiple assets against one another. It names trend following as a clear example and also points to systematic trend following, global macro, and factor investing as broader strategy families. In a single-asset directional approach, rules can determine when to enter and later exit a position without requiring a simultaneous trade in another asset.
The evidence is a brief conceptual answer rather than a worked strategy: it gives categories and examples but no formulas, performance data, or implementation details. It also notes that equity factor strategies can mix directional and relative-value elements, depending on how positions are built. The discussion cautions indirectly that publicly described strategies are often generic; it does not establish that any named approach will be profitable or specify how to test or manage its risks.
Key ideas
- Directional strategies seek to profit from an asset’s movement rather than relative pricing between assets.
- Trend following is a notable example of a directional strategy.
- Systematic global macro and managed futures approaches can include directional positions.
- Factor investing may combine directional exposure with relative-value selection and weighting.
- The discussion provides strategy families but no specific entry rules, evidence of returns, or implementation guidance.
Tags
Full text
# Are there any quant strategies which do not involve simultaneous buying and selling of two or more assets? # Are there any quant strategies which do not involve simultaneous buying and selling of two or more assets? Whenever I read about quant strategies it leads me to stratergies which involve simultaneous buying and selling of two or more assets. Pairs trading, arbitrage, market neurtal or headging all these approaches involves a simultaneous buying and selling of some assets. I want to know if there exists a strategy which doesn't follow this pattern. For example a quant strategy which explains mathematically when to buy an asset and sell that same asset in future (independently of other assets). If those exist then what are those and can you give a brief explanation of them? ## Answer by Chris (score 3) https://quant.stackexchange.com/a/45610 Broadly you're asking about directional versus relative value strategies. There are lots of directional approaches, but I've yet to see many discussed publicly in non-generic ways (I mean, if they work, why would anyone talk about them?). As others have noted, trend following is a notable example. I'd consider a lot of equity factor approaches as a combination of directional and relative value (eg, buying low vol stocks typically involves first identifying low vol and high vol stocks and then taking some position that skews toward the low vol basket, either by going long-short, weighting toward low vol, etc.). ## Answer by Jean-Paul (score 1) https://quant.stackexchange.com/a/45591 Take a look at Factor Investing, Systematic trend following/ CTA and Systematic Global Macro. See also this article on Bloomberg: https://www.bloomberg.com/news/articles/2018-10-02/your-guide-to-the-many-flavors-of-quant-investing-quicktake
Shown in full with attribution under the source's licence. Licence: CC BY-SA 4.0 (Stack Exchange)
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.