Crowding can be good for quants (sometimes) – Goldman

Study finds timing dictates different results for convergent and divergent strategies in herd moves

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Goldman Sachs is “exploring using crowdedness indicators as signals for timing different alternative risk premia strategies”, says head of R&D

It’s been the big fear plaguing quant managers for years, but crowding – when investors follow similar strategies and buy and sell the same assets in sync – isn’t always bad for systematic investors, according to a study from Goldman Sachs.

Heavy cashflows into quant strategies such as alternative risk premia have pricked concerns about what could happen if investors ditched assets in unison when those strategies stumble. The extra investment has also added to worries that some strategies are

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