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Mahmood Noorani , the founder and CEO, knew that he wanted something different. He wasn’t sure what it was, all he knew what that it had to be something that he hadn’t seen before.

And he isn’t afraid of new ideas. He was the one who approached Michael Hobson, Professor of Astrophyics at Cambridge and world-famous in his field, with the idea that they explore the financial markets together.
As a result, the "Look up™" brand was the strategic heart.


Mahmood Noorani, CEO, Quant Insight, said: “When astrophysics is applied to financial data, something extraordinary happens. You can see patterns where others often find confusion and you can make precise and accurate decisions instead of relying on ‘educated’ guesses.
"We needed a brand redesign that could capture and reflect the way we are pushing boundaries in the financial data world. Saboteur was able to see our vision and have translated our complex world into something eye-catching, brave and elegant. A brand redesign which is out of this world. It also brings clarity to a world which is overloaded and clouded with data."

Alex Clegg, The Dreaming Saboteur, said: “The financial sector is instinctively conservative. “Websites can look like they were designed in Excel – Quant Insight were clear from the beginning that they wanted their brand to be as different as the pioneering technology they’ve created.
“Elements float and drift in a seemingly random fashion. But, of course, there is pattern here. All you have to do is look up.”



About Quant insight
Quant insight provides global investors with unique insights and quantitative financial market analytics to help performance. Solutions are delivered through a range of products for easy implementation by investment managers, hedge funds, quant/systematic teams, portfolio managers and risk officers.


For further information, please contact:

Stephen Baldwin
sb@quant-insight.com

There is a surfeit of back-fitted narratives trying to align a story with price action. Instead Qi offers a 10y UST model that has a 95% degree of confidence & which currently shows yields as 0.5 sigma (16bp) low versus fair value. This latest move doesn’t look consistent with macro fundamentals.

Flows can dominate in the short term but the key macro drivers have strong explanatory power. Tight credit spreads & higher inflation expectations equate to higher yields & between them account for 30% of model confidence. Crude oil is, by some margin, the biggest single driver. Bond yields’ sensitivity to oil has risen sharply since early Feb.

Less obvious is the negative relationship with global economic growth; a pattern which emerged over March & runs counter to conventional thinking. It could reflect bond yields as a measure of US fiscal policy. Bad economic news results in a bigger fiscal response, & hence higher bond yields. Viewed in that light, the recent strong run of US data has reduced the likelihood of further fiscal stimulus, & thereby reduced the upward pressure on US yields.

Fitting a narrative to explain price action is inherently a subjective process. The quantitative pattern may not be immediately intuitive but is transparent, updated in real time & often the ‘explanation’ arrives after the fact.

From a macro perspective, that period of consolidation never saw a deterioration in fair value. Qi’s model value (red line) tracked sideways. The fall in spot price (white) took it to 0.5 sigma (6%) cheap to macro at the start of this month.

Now, after a bullish report from a US bulge bracket Investment Bank yesterday, spot is starting to rally once again.

Still, for believers in a copper super cycle, the metal still trades cheap to macro-warranted model value. 0.3 sigma is 3.4% below model.

Aside from green / EV dynamics, Dr Copper remains a global growth play. Global GDP growth accounts for nearly a third of model explanatory power. A model which has 90% confidence currently.

The Qi work on the shifting macro regime for momentum as a smart beta strategy can be found here

The February / March sell-off has, in valuation terms, left it 1.5 sigma (6.1%) cheap to macro-warranted model value. Back-tests suggest this is a rare but statistically significant level. Since 2009, only three times has ChiNext been in regime & with this big a negative FVG. Buying those dips elicited a 67% hit rate & 4.9% average return.

Perhaps most interesting of all is that Qi’s RETINA ™ is now flagging a Divergence buy signal.

RETINA ™ combines Qi’s existing macro valuations with a numerical measure of trend plus accelerating / decelerating momentum. In this instance the signal is exclusively predicated on valuation & one of Qi’s optimisation strategies.

A Divergence rule identifies when macro-warranted model value & spot price have moved in the opposite direction over the last 10 days. In this instance, the most recent sell-off has not been justified by macro fundamentals.

Macro valuation + trend / momentum overlay. Look Up ™

Only Blackrock is below our model confidence threshold & a function of micro, idiosyncratic drivers.

Otherwise, macro matters for US financials. Moreover, they are largely moving in line with macro fundamentals. Most of this week’s reporters are close to model fair value.

At the margin, Goldman Sachs & Morgan Stanley offer a slight valuation edge, trading just below macro model value. At the other end of the range, Bank of NY Mellon & State Street are both around 5% rich to model.

The macro profile is similar across the sector. Tight credit spreads remains the number one driver. Reflation is captured via a positive sensitivity to both inflation expectations & energy prices. Rising US real yields are a tailwind not a headwind.

In every case macro model value is flat-lining; consolidating after a 5month uptrend. The move in these factors will be critical in deciding the next move for financials.

The Qi Vol Indicator captures the ability of macro to explain price action across some key global benchmark instruments in equity, rates & FX markets.

When macro’s explanatory power falls, markets are more vulnerable to other factors like positioning & sentiment; both of which can cause sharp price swings. Hence, low macro model confidence equates to a higher Qi Vol Indicator which can, in turn, signal a period of elevated volatility.

There are some ‘false dawns’ but overall the Qi Vol Indicator has done a good job of leading sharp spikes in VIX over the last 5 years - summer 2016, “Volmageddon” early in 2018, Jan 2019 & most recently the Covid shock of February/March 2020.

Neither the absolute level, nor the rate of change in our Vol Indicator is currently giving any cause for concern. That said, the divergence versus the VIX is notable & worth monitoring.

One potential risk for H2 2021 is if, in sharp contrast to the stimulus in the US, Beijing chooses to actively rein in its growth. In z-score terms, the Chinese recovery (the blue line is Now-Casting’s China tracking GDP) has been the outlier & the clear engine of recovery early in 2021.

For all the talk of reflation, relative to long term trend, US growth has yet to post a similar upswing.

The ability to track the impact of Chinese or US growth on different asset classes over the months ahead will be absolutely critical. One to monitor. Moreover, Qi’s Optimise Trade Selection functionality gives clients the ability to identify which markets are most sensitive to Chinese or US GDP going forward.