From Complexity to Opportunity in the Credit Markets

The credit market landscape is analytics driven. Success hinges on the ability to obtain and leverage sophisticated analytics effectively. Having an edge in analytics can be the differentiating factor
5 Dec, 2023

Investing in credit markets presents a unique set of challenges and opportunities, from the complexity of the asset class to advanced data management requirements. Achieving consistent and reliable analytics across these instruments is no easy feat.

The credit market landscape is analytics driven. Success hinges on the ability to obtain and leverage sophisticated analytics effectively. Having an edge in analytics can be the differentiating factor between winners and losers. Firms armed with the capability to spot opportunities swiftly, identify arbitrage possibilities, and translate analytics into actionable strategies have a competitive advantage.

The ability to compare risks across assets, such as bonds and other credit products, is a complex ask. Without accurate and comprehensive data, effective risk management and hedging become difficult. Quantifi, with its origins deeply rooted in complex credit, addresses these challenges with industry-leading analytics for credit and broad fixed income. With a two-decade track record of providing analytics to leading banks and buy-side firms, Quantifi has honed its expertise in navigating the complexities of credit markets. What sets it apart? The strength of its models for fixed income and credit. Quantifi’s approach mirrors the way large global investment banks look at credit, so clients can compare bonds, CDO, indices and other credit products in the same way.

“Participants in the credit markets from investors to dealers are always looking for solutions that will give them an edge over their competitors. We have been impressed with Quantifi’s ability to remain at the cutting edge of pricing complex securities and building out scalable, easy to integrate technology.”

Sukho Lee, Executive Director, Structured Credit Trading, Nomura

Take Advantage of Relative Value Opportunities

Relative value trading is a popular investment strategy for firms looking to achieve high returns while minimising risk. This strategy depends on the isolation of identical or similar credit instruments, where one is assessed to be comparatively under- or overvalued. The strategy relies on extracting value from dislocation in the pricing of credit risk across markets, instruments, and maturities.

Although these strategies can differ significantly from each other, they have one thing in common; taking advantage of the opportunities requires sophisticated bond analytics. To be able to spot relative value dislocations, you need adroit analysis at your disposal to be able to isolate the opportunities and execute trades before the opportunities disappear. With Quantifi, you can perform in-depth analyses across different instrument types, presenting a unified view based on common risk factors – a rarity in the industry. This not only enhances your fund’s competitive position but also provides a holistic understanding of risk.

Precision and Transparency

Quantifi is designed to meet the needs of both the front and middle office. It allows traders to refine strategies, and identify and capitalise on market opportunities with enhanced precision. The middle office benefits from improved risk management capabilities across the entire portfolio. This not only promotes operational efficiency but equips teams to respond promptly to the ever-changing dynamics of the market. One of the standout features of Quantifi is its automation capabilities. It seamlessly handles complex processes, ranging from managing data related to credit events, to evaluating scenarios like default events. This automation isn’t just about streamlining operations; it’s a reliable mechanism that ensures accuracy and transparency in your risk assessment.

“We selected Quantifi because of its deep understanding of fixed income and credit markets. With Quantifi, we have access to market-leading analytics that are flexible and scalable. One of the key benefits is the ability to call Quantifi from Python.”

Jeysson Abergel, Head of Trading and Cross-Asset Strategy, Arini

What Quantifi offers its clients is a comprehensive platform designed to streamline the analysis of credit and fixed income products with a standardised approach. This approach ensures transparent and precise risk assessments, which are essential for investment managers when making decisions. The result? Clients experience enhanced agility, cost efficiency, and competitiveness, distinguishing them from others in the industry.

Become confident in credit markets.

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