VIX Explanation; Regime Shift for Gold; Valuations

Quant Insight’s research is built on an analytical framework for understanding asset price movements and valuations. Their analysis distils signals from its quantitative tool that covers thousands of securities in real time. The secret sauce is that they use algorithms to untangle and isolate which macro variables (typically correlated) that are driving asset prices. Another attribute to their model is its ability to identify which assets will be most sensitive to changes in a particular macro factor. and when a particular theme is out of regime altogether (i.e that cannot be explained by macro factors). They’ve just put out a note that that looks at recent shifts in regimes. IN: VIX. OUT: Gold. QI explain that the VIX spend most of 2017 out of regime, but this changed abruptly last week. VIX is now well explained by and highly sensitive to actual volatility and real yields (as well as credit spreads). Meanwhile, Gold seems to have broken down, say Qi. The metal had been well explained by real and nominal rates, QE expectations and the US Dollar for the better part of 2 years. This is no longer the case, say Qi, and is a red flag that signals increasing volatility ahead. Qi models can be useful in this volatile environment to identify new regimes, drivers and the pattern under the noise. Click below to request more information on Qi. The beauty of the Qi system is that they can tailor their analysis specifically to the exposures, in a very timely fashion.