Volatility isn’t easy to quantify, says Adrian Banner, CEO and CIO of INTECH Investment Management. His firm is a sub advisor for the Renaissance U.S. Equity fund.

That’s why he’s spent decades developing volatility models that “aim to capture…different information about volatility. One of the things we’ve looked at is the difference between high-speed—[or short-term]—and long-term volatility.”

Read: Build long-term portfolios

In order to test models and theories, Banner says portfolio managers must examine large volumes of data. He uses more than two decades worth of information when assessing the movements of U.S. and global equities.

Read: A 7-step approach to security selection

He adds, “Volatility [can be] a source of reward. But it’s also a source of risk, so try to find balance” for clients.

For more on leveraging volatility, read:

Benefit from volatility

The difference between volatility and risk

Clients hate volatility? Here’s help

Canadian advisors predict market volatility

FACEOFF: Coping with volatility

And for more on portfolio management, read:

Stop playing with your optimizer

Managing volatility in equity portfolios

Originally published on Advisor.ca

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