The Study On The Risk Management Of Quantitative Trading Method On The Hedge Funds For Achieving Alpha

Increasing development and expansion of the capital market today, participants are hoping to obtain a variety of benefits from this booming market. Financial firms, even individual investors, are operating their own variety of investment strategies. But the corporate investors are more professional than individual investors in its approach to investing and risk management methods. There are many types of investment strategy, risk management on the different strategies is particularly important.Generally, financial firms always have their own investment systems, internal control systems, many of the employees, etc. How to improve the efficiency of investment management and how to pursue earnings on the basis of good controlling risk is a test of financial institutions. At the same time, as the most important participants, financial institutions'ability to maximize their asset pricing, promoting capital market to move forward, even promoting the development of China's capital market, is also the major financial institutions an important mission.In the developed countries, institutional investors and hedge funds occupy the vast majority status. With the development of China's capital market, stock index futures and margin trading and other subjects are constantly enrich, and the policy liberalization, the demand for hedging transactions will be increasingly strong, risk management of local hedging team is an enormous challenges.In this paper, the author uses the principle of combining theory with practice to analyze hedging funds of X securities, by using literature researching, case research, comparative analysis and other methods. By using "Capital Asset Pricing Model", in-depth understand the quantitative trading method on the hedge funds for achieving Alpha of X securities, and find the problems of this financial product in all aspects, such as how to deal with the variety of macroeconomic policy and regulation, how to model, policy enforcement and follow-up management, etc. Then, the author analyzes the reason of X securities risk control problems, including risk factors, the exposure of risk measuring and monitoring.Based on above-mentioned, combined with the actual market conditions and the current regulatory status, the author proposes the methods for improvement, and tries to find this kind of hedging products common elements of risk management. There are three aspects of risk management on hedging funds of Alpha strategy which is the most representative to the hedge funds using quantitative trading method. In the current market environment, the most important risk management is macro policy and regulatory risks, such as how to effectively deal with the stock index futures trading restrictions started from September 2015, and due to lack of market liquidity and the problem of a long-term stock index futures agiotage. In addition, the author proposes specific measures to deal with other problems, including response to the risk control in modeling process, and in the strategy implementation process, these measures will help to avoid such as Everbright securities "816·incident" from happening again, and also effectively curb such incidents risk of causing a chain reaction.This paper contributes to promote the risk management capabilities of this kind of hedge funds for achieving Alpha strategy, improve its risk management system. For the risk management of other investment institutions also have some reference and reference.