Market Regimes

Market regimes refer to distinct environments characterized by trends, volatility, and risk sentiment. Common regimes include bull markets, bear markets, and high-volatility phases. Quant strategies often use regime detection models to adapt positioning based on prevailing conditions. For example, exposure may be reduced during high-risk regimes. Recognizing regimes helps avoid applying the same strategy blindly across all environments. Adaptive models that respond to regime shifts tend to outperform static approaches over long horizons.