An Empirical Study On Measurement And Prevention Of Volatility Risk Of Quantitative Investment Funds In China

With the rapid prosperity of China’s financial system,the investment field of residents continues to expand and extend.However,the lack of professional investment knowledge makes it difficult for retail investors to invest directly in the rapidly fluctuating stock market.Based on this,the emergence of public funds provides ordinary investors with a better choice of comprehensive allocation of the financial market.In the past 20 years,China’s fund market has expanded rapidly,and the enthusiasm of resident investment funds has increased day by day,However,many investors are easy to chase short-term highs,ignore risks and suffer losses.Quantitative investment fund is a new type of fund born under the impetus of modern information technology.It realizes investment management by modeling stock selection ideas.From foreign experience,its advantages lie in rational decision-making,investment timeliness and strong ability to resist risks,and it has good investment value.However,due to the general lack of awareness of investors in China,it is unable to properly understand the volatility risk of quantitative funds,which hinders its further development,It is difficult to play a positive role effectively.This paper focuses on the empirical and quantitative research on the volatility risk of quantitative funds,analyzes its return characteristics,volatility risk level and risk dispersion effect,and objectively shows the volatility risk and investment value of China’s quantitative funds.After a comprehensive overview and analysis of quantitative funds and their theoretical foundations,20 representative quantitative fund products were used as empirical research objects.Descriptive statistics and normal tests were used to analyze the return ability and distribution characteristics of quantitative funds.Then,extreme value theoretical models and divine network models were constructed to measure fund volatility risk under different confidence levels,and the effectiveness of the model was backtested to analyze the extreme The absolute risk levels of quantitative funds under two conventional probabilities were compared horizontally with the volatility risks of active stock selection funds and the Shanghai and Shenzhen stock indexes of the same type,to explore their volatility risk characteristics and risk diversification effects.Finally,based on empirical results,suggestions for risk prevention and standardized development of quantitative funds in China were proposed.The main conclusions of this article are as follows:(1)The absolute return level of the quantitative fund is in a lower range,and it has no ability to make extraordinary profits.However,compared with similar risk diversification products,its overall profitability is better than that of the traditional active stock selection fund and stock index.Especially in the overall downward market,the yield performance is more stable,the "right peak" feature of the income distribution is obvious,and it has long-term investment value.(2)The extreme value theory model can effectively measure the extreme volatility risk of the fund,while the neural network model can more effectively identify the conventional risk of the fund,and can be used for the expected prevention of volatility risk.From the analysis of the volatility risk results,the absolute risk of the quantitative fund is not high.Both the extreme daily volatility loss risk and the conventional daily volatility loss risk belong to the normal risk range that ordinary investors can bear.The quantitative investment method does not lead to unconventional investment fluctuations due to the lack of subjective experience dependence and operation.(3)Compared with the traditional active stock selection investment fund,the quantitative fund has significantly lower extreme volatility risk and conventional volatility risk.Compared with the Shanghai and Shenzhen stock indexes,the quantitative fund has less extreme risk exposure and can effectively eliminate the non-systematic risk between the investment objects.The investment method is more rational,the overall risk dispersion effect is better,and the antirisk ability is stronger,On the whole,quantitative funds are the preferred investment choice among low-risk investment products in China’s market.Based on the risk characteristics and causes of volatility risk of quantitative funds and in combination with China’s current development situation,suggestions are put forward from the perspective of three parties to promote the prevention,standardization and sound development of the fluctuation risk of quantitative funds: from the perspective of fund managers,we should improve the planning and management of quantitative fund products,prepare for risk expectations,and optimize and update the investment strategy in time according to the market logic,and enrich the quantitative investment system;From the perspective of fund investors,it is necessary to diversify the holding of funds,avoid excessive risk exposure,improve risk awareness,and adhere to the long-term investment philosophy;From the perspective of government regulation and fund development,it is necessary to formulate and implement supporting regulatory policies,promote the development of innovative funds,and promote the rationality and prosperity of the investment market.