The investment process of Numeric involves various strategies that aim at improving the firm’s performance. One of the methods entails the portfolio managers making buy, sell, sell-short, and buy-to-cover decisions. The process was introduced by Numeric’s traders or through the use of electronic trading services. For instance, some of these facilities that simplify the processes of investment are Quantex and Inset. Procedures also involved putting new stock positions and adjusting the existing ones. The firm also exercised the partitioning of the stock universe, which involved eight economic sectors. The primary industries, including consumer cyclical, consumer noncyclical, energy, financial, industrial, and technology, are engaged in the investment practice. The managers also exercised the studying of new earning announcements to determine the progress of the firm. Thus, focusing on the investment process can help the organization determine the best plan that can attract more consumers and increase its sales.
Scores analysis is another essential aspect that was exercised in the investment process. For instance, Numeric recorded a deficit of 165,000 shares, while analysts estimated PepsiCo’s current quarter’s earnings at 24% per share. Therefore, the analysis of the shares is vital since it reveals the progress of the investment process. The momentum score was also analyzed in the procedure to show the changes that the firm underwent. For instance, a recording of the momentum score going from negative (-0.49) to positive (+1.35) was analyzed in PepsiCo’s case. Thus, analysis can use the data provided when focusing on changes that can be implemented by the firm to increase its production and maintain its competitive advantage.
Assumptions are also made by firms when working with different models that involve the investment process. In this case, Numeric hypothesizes that the trades could be initiated by the model’s latest rankings or based on the information provided in the previous market close. These assumptions have played a significant role in enabling the firm to focus on earnings and ways to develop the investment process. For instance, the examination of the profits before the markets opened was steered by an assumption of trades being provided by the previous market. These conventions can help the managers develop strategies to improve the models and ensure that they enhance the organization’s performance. For instance, they can ensure that they limit expenses and ensure that they increase the output.
Sources of the value added is another aspect that can be analyzed when focusing on the Numeric firm. Numeric ensured that it combined momentum and value since they complemented one another. In this case, the momentum approach worked better for some stocks and the value model for others. The two systems were the sources of added values and had some strengths and weaknesses. One of the advantages is their ability to predict future price movements. Furthermore, the models helped the company to have more consistent performance. The drawbacks are that the approaches had minimal utility and basic industry stocks. Consequently, Numeric can focus on strategies that ensure that the models’ disadvantages are minimized and the benefits are utilized to improve the firm’s productivity. For instance, predicting the future price markets can help the firm determine its production procedures to prevent manufacturing products that may lead to losses.