The quantitative finance industry is poised for significant shifts in 2026, as highlighted by Dr. He Kang at the China Quantitative Investment Year-End Summit. With traditional alpha generation becoming increasingly challenging, new strategies such as the "Order as Token" approach and alternative assets like cryptocurrencies are emerging as key areas for institutional investors. The rapid growth of public quantitative funds, now exceeding 200 billion yuan, underscores the industry's evolution towards more flexible and agile strategies.
Dr. He emphasized the importance of dynamic asset allocation and the rise of sub-domain modeling, which segments stocks into categories like growth and small-cap for targeted strategy development. The integration of large language models (LLMs) in trading, treating financial data as a language, represents a revolutionary shift in quantitative finance. Additionally, the cryptocurrency market's unique characteristics offer abundant alpha opportunities, with strategies like Funding Rate Arbitrage gaining traction.
Looking ahead, the focus will be on dynamic game theory and antifragility, with a shift from static allocations to more adaptive strategies. As traditional finance professionals explore crypto markets, the entry of established institutions into decentralized trading is anticipated, bringing new opportunities and competition.
Quantitative Trading Faces New Paradigms in 2026
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