Quantitative Analysis

Quantitative analysis

An assessment of specific measurable securities or investment factors, such as cost of capital, value of assets; and projections of sales, costs, earnings, and profits. Combined with more subjective or qualitative considerations (such as management effectiveness), quantitative analysis can enhance investment decisions and portfolios.

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Quantitative analysis

An analysis of the mathematically measurable figures of a company, such as the value of assets or projected sales.

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Quantitative analysis. When a securities analyst focuses on a corporation's financial data in order to project potential future performance, the process is called quantitative analysis.

This methodology involves looking at profit-and-loss statements, sales and earnings histories, and the statistical state of the economy rather than at more subjective factors such as management experience, employee attitudes, and brand recognition.

While some people feel that quantitative analysis by itself gives an incomplete picture of a company's prospects, advocates tend to believe that numbers tell the whole story.

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Quantitative Analysis

What Does Quantitative Analysis Mean?

A business or financial analysis technique that is used to understand market behavior by employing complex mathematical and statistical modeling, measurement, and research. By assigning a numerical value to variables, quantitative analysts try to replicate reality in mathematical terms. Quantitative analysis helps measure performance evaluation or valuation of a financial instrument. It also can be used to predict real-world events such as changes in a share's price.

Investopedia explains Quantitative Analysis

In broad terms, quantitative analysis is a way of measuring things. Examples of quantitative analysis include everything from simple financial ratio calculations such as earnings per share to more complicated analyses such as discounted cash flow or option pricing. Although quantitative analysis is a powerful tool for evaluating investments, it only tells half the story; the other half is qualitative analysis. In financial circles, quantitative analysts are referred to as quants, quant jockeys, and rocket scientists.

Related Terms:
• Fundamental Analysis
• Gordon Growth Model
• Head and Shoulders Pattern
• Technical Analysis
• Trend Analysis