Risk Management in Quant Strategies

Risk management is central to quantitative investing. It encompasses position sizing, diversification, drawdown controls, volatility targeting, and regime-based exposure adjustments. Quant risk frameworks continuously monitor portfolio behavior and enforce constraints to prevent excessive losses. Effective risk management focuses on survival first, returns second. Protecting capital during adverse periods enables long-term compounding. Rather than eliminating risk, quant strategies aim to manage it intelligently, ensuring portfolios remain resilient across market cycles.