How Citadel Turns Daily Data Into Millions in P&L
Short-term L/S idea generation
We have recently talked a lot about the importance of deep fundamental research to inform long-term trades, including at the pods. We even hosted a former PM and partner at Citadel who spoke about that in detail.
If one end of the spectrum is long-term trades built on deep fundamental research, what’s on the other end?
It’s short-term trades focused on incremental alternative data points and narratives.
The rise of multi-managers and their risk models have accelerated this shift. At its core, the risk framework pushes for alpha now, not later and generally requires a higher velocity of ideas. And of course, this move has been made possible by the explosion of alternative data.
While some multi-manager PMs are widely known for being the experts at these data-driven/shorter-term trades, due to their expertise in data, access to resources and the fact that the MM risk model requires it, there are many other long/short managers who also take advantage of them. It’s a necessary tool even for long-term investors who want to capitalize on opportunities and not fall behind.