Quantitative analysis is a mathematical and statistical method of studying behavior and predicting outcomes that investors and management use in their decision-making process. Through the use of financial research and analysis, this form of analysis seeks to assess an investment opportunity or estimate a change in a macroeconomic value.
Explanation :
Using complex financial and statistical models, this analysis quantifies objective business data and determines the effects of a decision on the business operations. With respect to investing, this approach quantifies trends following patterns and strategies of high-frequency trading to identify the correlation between the variables and determine the worthiness of an investment. The most commonly used forms of quantitative analysis in business are the cost benefit analysis, the break even , the statistical analysis, and the feasibility study.
In a nutshell :
- Quantitative analysis (QA) is a technique that uses mathematical and statistical modeling, measurement, and research to understand behavior.
- Quantitative presents reality in terms of a numerical value.
- Quantitative analysis is used for the evaluation of a financial instrument and predicting real-world events such as changes in GDP.
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