Quantitative analysis

In economics, quantitative analysis is analysis that uses mathematical and statistical techniques to explain, or forecast, different economic variables. Apply these techniques using economic theory as a basis.

The quantitative analysis uses econometrics as the main work tool. The reason why quantitative analysis is used is the need to measure, evaluate or value economic reality from the most objective point of view possible.

For example, we can argue that a country's GDP will grow thanks to increased investment and expansionary fiscal policy. According to economic theory, if investment increases and taxes are reduced, a country must grow. However, in economics nothing is certain. After all, it is a social science. So, taking into account the inevitable uncertainty, quantitative analysts try to study how exactly these events will affect according to their amount. Another use of quantitative analysis is to demonstrate economic theories.

In recent years, thanks to the great development of technology, the available databases have increased as well as computer programs that facilitate this type of calculations. Therefore, the use of this type of analysis is becoming more and more frequent. However, quantitative analysis, even if it is mathematical, is not infallible, much less perfect.

It is essential to understand the economic environment and understand that there are a large number of variables that cannot be measured. Hence, many data are just estimates.

Quantitative Stock Market Analysis

Quantitative analysis is applied in different sectors of the economy. Companies that want to quantify customer satisfaction, banks that use models to control their risks, and governments that make predictions to implement various policies.

One of the areas in which this type of analysis is most used is in the area of ​​investment in the stock market. This concept is related to quantitative trading, but they are not the same. Quantitative analysis is a part of quantitative trading.

The stock market reality can be analyzed from different premiums. One of these bonuses is quantitative analysis. An example of quantitative techniques for trading on the stock market are the following: