This is a summary of links recently featured on Quantocracy as of Sunday, 11/30/2025. To see our most recent links, visit the Quant Mashup. Read on readers!
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Systematic Edges in Prediction Markets [Quantpedia]Prediction markets are financial platforms where participants trade contracts linked to future events, with prices reflecting collective probabilities. While these markets efficiently aggregate information, systematic inefficiencies create trading opportunities. Notable strategies include inter- and intra-market arbitrage, exploiting price differences across platforms or mispricing within a single
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Deep Latent Variable Models [Gatambook]In our previous blog post, we introduced latent variable models, where the latent variable can be thought of as a feature vector that has been encoded efficiently. This encoding turns the feature vector X into a context vector z. Latent variable models sound very GenAI-zy, but they descend from models that quant traders have long been familiar with. No doubt you have heard of PCA or SVD (see
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Systematic stock selection with macro factors [Macrosynergy]Macroeconomic conditions drive divergences in business profitability, making timely economic data a meaningful foundation for stock-selection factors. This post introduces basic methods for constructing such factors, focusing on statistical learning techniques that estimate how individual stock returns (relative to the market) respond to various economic trends. We use five model types to estimate