Navigating risk in today’s complex markets calls for a tailored approach to risk management, one that goes beyond the offerings of standard, commercially available models. In its latest piece, PGIM Quantitative Solutions’ Equity team explores how a customized risk framework can address these complexities to help improve investment outcomes:
- Custom Frameworks for Strategic Alignment – Moving away from generic models, our customized framework aligns risk control with specific investment objectives for enhanced precision.
- Refinement of Risk Factors – Adjusting traditional factors like industry classification and growth exposure ensures risk models complement rather than conflict with alpha generation.
- Evidence of Better Outcomes - Empirical testing demonstrates improved risk-adjusted returns and stronger alignment between risk and alpha models.
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