Will Quant Finance Grow?
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- Опубліковано 17 лют 2024
- I subscriber asked if quantitative finance will grow. They are asking as they are in high school now and it will be 8-9 years before they have finished all the required schooling to become a quant.
The short answer: yes quant finance will keep growing and not be replaced.
What many people don't realize is that the quants at many firms and banks are actually building out the machine learning pieces used behind many AI applications and they are of course still utilizing math and stats to develop robust models. The truth is that ML is nothing more than a sub section of statistics and AI is nothing more than computer programming used to automate processes which include models. We will always need people to build new models whether it be statistics, math, ML, or AI as humans are constantly changing which requires new models. Finance and human behavior is not a hard science where it can be modeled once and done.
Also as the technology increases it will make some of the more complicated tools and model easier for smaller firms which will need models. Even with the rise of open source modeling software like R and Python, we are seeing more firms building models.
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Thanks alot!!, I am a highschool senior and I'll start my BS maths and stats this year, this was really helpful :)
this is one of the best vids on the channel, so informative. Literally laid out the industry so clearly. As always, God bless ya!
Great video! Thanks for sharing your knowledge Dimitri :)
Thanks for this detailed video, Dimitri. Been watching your videos lately. Really enjoyed understanding how quant finance is being used in various aspects of finance industry.
God knows I needed this video.
Thank you Dima
This video did a really good job explaining the different areas of quant finance. Thank you!
Thanks! It has taken me years to really figure out how the industry works. Not many people share what they actually do and how all the pieces fit together.
Hey Dimitri, a fan from the UK here. Do you think you could make a video talking about the quant fields in other countries and maybe mention the key differences compared to the US field? I would really like to get some information from you about the UK quant field. I love your videos; keep it up!
Can definitely relate to this. Machine learning is just statistics and optimization used for making predictions by minimizing the error component or maximizing the distributions we are assuming for the data. Most if not all quant models use these principles. Personally I feel quants can or rather should differentiate themselves by having a strong foundation in fundamental math, optimization, probability theory, stochastic and time series related topics. Also, an ability to code and test models not necessarily at a massive scale (there are quant developers / software programmers who'd be better an optimizing the code as that is what they do :) ). And as you gain experience, the domain knowledge you build over time is also super useful. For instance, if youre woking in fixed income / structured products, understanding drivers of price / cash flows / prepays/ default /duration and spread analytics etc. also helps you grow. Personally, I've always felt that understanding the pricing /trading side has helped me grow and made things more interesting.
Hmm this help me a lot. I am now Data scientist and background with Bsc in statistics. Even the new paradigm on Deep learning or LLM in nowadays, I also think that the foundation of financial mathematics also needs and must to be understood for implementing the Machine learning models. As you said, ML just loss and distribution, but the feature engineering and extraction comes with domain expert like quant.
@@Joachim1993yes exactly. Also as you build some domain knowledge, it helps to spot something that looks obviously incorrect or to track performance or to think of scenarios to watch out for.
Thanks a lot. Very helpful.
Glad it was helpful!
It’s crazy how the comp sci people that are literal data analysis "experts" don't understand nor the models nor the math behind whatvthey do and just call it a black box. Universities should make Data Science an Applied Maths and Stats formation instead of forming people that just know how to implement the algorithms.
Thank you so much
No problem!
Hi Dimitri! Thank you for the video. Quick questions with some background. I completed one of the few undergraduate programs in Quantitative Finance in North America at the University of Toronto, but your channel and your opinions encouraged me to pursue a Master's in Quantitative Finance. I know that you've reviewed multiple Master's in Quantitative Finance programs in the US but I don't think you've talked about the two largest Canadian ones (MMF at the University of Toronto and MQF at the University of Waterloo). Also, what do you think of these statistics departments attempting to offer quantitative finance as a specialization for undergraduate statistics degrees? (The program is a double degree: HBSc in Statistics, specialist in quant finance and a BBA in Finance at the University of Toronto)
It's interesting because some of the undergraduate students in our program obtained internships as Quantitative Analysts in large Canadian banks, and I know you've mentioned how difficult it is to break into quant finance unless you have a master's degree. What do you think?
Thank you so much for your UA-cam Channel, Dimitri!
Amazing video. I’m an undergraduate right now and this really opened my eyes to the vague idea of quant that people throw around. Do you have any recommendations for books or other resources to learn more about risk management?
Thank you so much for your videos, Dimitri! Do you know if Quant Programs will allow you to make up for linear algebra and multi-variable calculus at their college if you get accepted? I want to graduate soon and don't have enough time to get a math minor but I have taken Calculus I & II. I also have a lot of coursework in Stats and Comp Sci. which might waiver some foundational courses in a master's program.
Some programs do and quant programs in business schools usually require less math. Take a look at the business schools first and see if you meet their requirements.
You could do a Graduate Certificate in Maths/Stats? And that GradCert would allow you to focus on just catching up only those areas, before you then go onto a good Masters.
Do you think that as quant evolves, that the emphasis will shift from math, stats, and econometrics to computer science and engineering? We've already seen things like stochastic calculus not being quite as useful as it once was, and as datasets and computation power gets bigger do you think that CS people who understand stats will start being more attractive than someone with math, stats, econometrics skills? Or does it stay useful for the actual quants to be more heavily rooted in math and not needing to dive too deep into actual topics of study in CS as long as they are able to code?
It will start math and stats focused. Even ML and AI are math based. You can't have computers without math either. Math will continue to advance technology.
@@DimitriBiancoofc it will be based off of maths, everything is maths, but thats not the question. they were asking if a candidate specialized in cs would be better than maths.
cs uses maths sure, but a person standing up uses maths to balance themselfs too yet that wouldnt be enough for quant
So this is just engineering but with different steps ? The process looks very similar to fluid mechanics
If I want to start my masters till ~29 years old due to finances will that hold me back ? I naturally excel at statistics and enjoyed my undergrad courses.
Great vid. What are the books you said that are good on AI/ml quant finance?
In the description he has a link to his website that has all the books
@@sabrinaxph yeah but the book section is not updated :D
I'm currently reading Machine Learning in Finance by Dixon, Halperin, and Bilokon. I've only reading the reinforcement learning section now though. It's more of a focus on finance book than a broad ML book.
@@DimitriBianco Thanks for the reply.
Hi Dimitri. Thanks for the information. I am a Math Graduate. I have only used Excel Spreadsheet in my professional career. Can I apply Quant concepts using Excel and VBA? I am not having any programming background.
it's too slow. You will need to learn 3 languages. First u will need to learn R to do statistics. Then u will need to learn SQL to do database management. Those two are enough to do basic stats and economics. However, Ai is generally done in python so u need to learn that. if u want to do more Quant dev work u will need to learn c then c++. excel won't cut it unless ur doi g projects with very little data.
No. Excel doesn't support modeling outside of a simple regression and doesn't provide all the tests needed to ensure the model is defined correctly. You need a stats language like R, SAS, or Python
@@DimitriBianco Thanks.
Hello! Who do you think about CQF certificate, when you can do it still in undergraduate? Does it add value to CV when applying right after undergraduate?
if I recall correctly he mentioned in a podcast that he finds it too expensive for what it is
@@AL_383 thanks for the answer!
I’m trying to study my undergrad, and make a networking while doing CQF as well, if it will be possible to sign up for the CQF program when on my last year at uni. What do you think?
I can't speak for other countries but in the US it is not considered a replacement for a masters which is the minimum requirement for quantitative finance. For quants certifications are really a big deal so I wouldn't take the time to get the CQF.
Thanks for the response! :)
Me thinking im a fake quant working in Credit Risk Modelling, slowly studying and planning on transitioning to FO pricing quant field, (to be a real quant) dmitri: the fake quants are those damn pricing quants! Maybe the real quants are the friends we made along the way...edit: the titles dont matter, just have fun and learn.
It isn't until you read books like, My Life as a Quant that you realize front office quants are business analysts.
Because you talked a lot about education, what kind of resources would you recommend, especially as you were talking about books? What kind of background do people need?
You need a graduate degree in stem and a good balance of statistics, math, and programming.
Does A quant finance postgrad have to be a BSC or can it also be BCOM
It depends on the postgraduate program and what classes you took as an undergrad.
Hey Dmitri, I'm 39 with a B.Eng degree in Electrical/Electronics Engineering. I also have expertise and a 3months experience as an ML/Backend Engineer. I have been trading the FX market for say 2yrs, and would love to be successful at it. I am thinking of an MSc in Financial Engineering.
Considering my age what would you advice pls.
Thanks for your anticipated response!
Do you think i should learn from the "streets"?
Dimitri, do US universities admit students who are 40+ years in age to study quant finance?
Yes they will admit anyone who is qualified. Remember they are making money.
Hi Dimitri Bianco
My background is of no proper interest - i do have an offer to do mathematical finance MSC- i am currently interested in quantitative research and development (ultimate goal is to become a portfolio manager). I am looking for help in generating list of project ideas in this field. I'm not concerned about the complexity, size or language of the projects, as I'm willing to dedicate around eight months to twelve months to personal learning and building.
Books i own right now:
Essentials of investment by Zvi Boodie et al
Options Futures and other derivatives by John hull
Time series analysis by James D. Hamilton
Intro to Econometrics Jeffrey M. Wooldridge
Intro to statistical learning with applications in R by G james
Analysis of Financial Time Series by Ruey
Topics of Subjects
Numerical analysis
Mathematical modelling
Complex variables
Stochastic
What do you think about CFA
I have a few videos regarding the topic. This is one of them, but it's valued more in the buy side by finance people.
ua-cam.com/video/zzQ9ycybSMw/v-deo.htmlsi=D9Z3U523QD51ThhC
when are you gonna get on Lex Fridman or Joe Rogan podcast?
Lol I wish I was invited. It would really help grow this channel.
I have a channel Machine learning. Let me know if you want to come on.
I am a statistician, who uses Combinatorics & probability tools for ML/AI problems.