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.”
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.
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:
And for more on portfolio management, read: