iQUANT pre-built portfolios use historical standard deviation as the primary risk measure instead of maximum drawdown or returns due to its higher repeatability. Standard deviation has a 0.9 correlation with future volatility, while maximum drawdown has 0.5 correlation with downside risk. Historical standard deviation explains 85% of future volatility, compared to less than 50% for return-based measures.
Portfolios are Traditional or Dynamic. Traditional portfolios have fixed stock-bond allocations, while Dynamic portfolios adjust based on targeted risk levels. Advisors choose between Target Risk portfolios, which maintain specific risk levels, and S&P 500 Directional portfolios, which track market movements.
Using data-driven models, iQUANT helps advisors manage risk with a time-tested and justified investment process.