Research
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Intelligent Risk Management
At AstratInvest, we believe that superior risk management is the key to consistent, long-term outperformance in the Indian equity markets. Our proprietary quantitative model integrates risk management at every step of the investment process, ensuring that we maintain a balanced risk-reward profile across our portfolio.
Key Features
1. Rigorous Stock Selection:
Our quantitative models screen the Indian stock universe to identify opportunities with asymmetric risk-reward profiles. We exclusively select stocks with a minimum 3:1 reward-to-risk ratio , ensuring that potential gains significantly outweigh downside risks.
2. Dynamic Position Sizing:
Position sizes are determined by our algorithmic models, which factor in stock-specific volatility, market conditions, and overall portfolio risk. This approach allows us to maximize exposure to high-conviction ideas while maintaining prudent risk levels.
3. Adaptive Trailing Stop-Losses:
We implement sophisticated trailing stop-loss mechanisms for each position. These stops dynamically adjust as stocks appreciate, locking in gains while providing room for further upside. This strategy helps us to 'let our winners run' while systematically minimizing potential losses.
4. Capped Drawdowns:
Our risk management protocols are designed to limit overall portfolio drawdowns to levels significantly below industry standards. This is achieved through a combination of position sizing, stop-losses, and portfolio-level hedging strategies when necessary.
5. Real-Time Risk Monitoring:
Our quantitative systems continuously monitor both individual positions and overall portfolio risk. Any significant changes in stock-specific data or broader market conditions trigger immediate risk assessments across all holdings.
6. Macro-Risk Integration:
We incorporate macroeconomic factors and market sentiment indicators into our risk models. This allows us to adjust our risk posture proactively in response to changing economic conditions or market regimes.
7. Correlation Analysis:
Our models analyze the correlation structure of our holdings to ensure proper diversification and to avoid concentration risks that may not be apparent when examining individual positions in isolation.
8. Stress Testing and Scenario Analysis:
We regularly conduct stress tests on our portfolio using historical scenarios and hypothetical market events. This helps us understand potential vulnerabilities and adjust our positioning accordingly.
9. Liquidity Risk Management:
Given the unique characteristics of the Indian market, we pay special attention to liquidity risk. Our models factor in trading volumes and potential market impact to ensure we can exit positions efficiently if needed.
10. Continuous Model Refinement:
Our quantitative researchers constantly refine and enhance our risk models based on new data and evolving market dynamics. This iterative process ensures our risk management strategies remain at the cutting edge.