What are the specific returns and common returns?

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What are the specific returns and common returns?

posted Dec 18, 2018

I guess that specific return is the return linked with the logic of the algorithm it self. I can' t guess what is the common return.

2 responses

I guess it is very very easy. No one answering...

Joakim Arvidsson (Cream Mongoose)

Hey Emanuele,

Good question! Have a look at this thread, as well as the associated Q Risk White Paper (see initial post in that thread) to get a better understanding of 'specific' vs 'common' returns.

In short, 'specific' returns are returns that are not correlated/attributed to any of the known Risk Factors, as defined by Quantopian (i.e. Value, Size, Momentum, etc). I believe it also includes the market as a whole (e.g. beta to SPY), though I could be wrong.

Hope this helps. :)

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The material on this website is provided for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation or endorsement for any security or strategy, nor does it constitute an offer to provide investment advisory services by Quantopian.

In addition, the material offers no opinion with respect to the suitability of any security or specific investment. No information contained herein should be regarded as a suggestion to engage in or refrain from any investment-related course of action as none of Quantopian nor any of its affiliates is undertaking to provide investment advice, act as an adviser to any plan or entity subject to the Employee Retirement Income Security Act of 1974, as amended, individual retirement account or individual retirement annuity, or give advice in a fiduciary capacity with respect to the materials presented herein. If you are an individual retirement or other investor, contact your financial advisor or other fiduciary unrelated to Quantopian about whether any given investment idea, strategy, product or service described herein may be appropriate for your circumstances. All investments involve risk, including loss of principal. Quantopian makes no guarantees as to the accuracy or completeness of the views expressed in the website. The views are subject to change, and may have become unreliable for various reasons, including changes in market conditions or economic circumstances.