Hedge funds and the new, new math

After the credit markets tanked, a good number of quantitative hedge funds tanked so much so, that some people started screaming the Emperor has no clothes. But Wall Street isn't giving up on quants. In fact, these funds are pressing ahead with even more radical concepts. According to Alpha magazine: "They are pressing into new realms of computational finance, applying concepts from molecular physics, mathematical linguistics, artificial intelligence and other scientific disciplines." Some firms are "pinning their hopes on machine learning - statistical methods that allow computers to identify relationships in financial data and make predictions from them." One big theme is the quant designers are trying to incorporate other assets classes into their models, not just stocks.  

For more:
- here's the Alpha article

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