Quant Analyst
function in a professional context:
These professionals hold a technical role and are primarily tasked with the management and valuation of financial/insurance products and the assessment of their risks.
Their main functions include:
• Development and Valuation of Financial Instruments: Design both traditional financial products (stocks, bonds) and innovative financial products (derivatives and structured products), for personal investment and collective savings plans (funds and asset management).
• Fair Value Measurement: Break down the products in the replicating portfolio and calculate their fair value, also taking their level of liquidity into account, as in the case of over-the-counter instruments.
• Structuring Analysis: Evaluate the impact of different structuring choices, including exotic products, on the value of financial products.
• Financial Engineering Application: Apply financial engineering categories for measuring financial statement items, using techniques such as real options.
• Insurance Skills: Analyse and develop models for insurance products, assess risks and allocate the necessary technical provisions. Apply quantitative methods for insurance risk management, including modelling of expected losses and insurance premium changes.
• Risk Analysis: Use statistical models and algorithms to analyse and quantify financial and insurance risks, contributing to risk management strategies.
• Interdisciplinary Collaboration: Work in close collaboration with risk management teams, actuaries and industry professionals to optimise investment and hedging strategies.
competencies associated to the function:
The specific skills of a quantitative finance specialist include principally:
1) In-depth knowledge of the concept of mathematical and statistical probability to calibrate market data
and assess financial products;
2) Study of mathematical techniques to analyse uncertain variables and random processes;
3) Ability to use numerical calculation to apply mathematics and statistics to
financial engineering problems;
4) Knowledge of computer tools for concrete application of knowledge to actual data.
In addition to this knowledge and self-learning and lifelong learning skills, graduates will possess
the following transversal skills:
1) Knowledge of the institutional aspects of financial products, markets and interested parties;
2) The ability to communicate the results of complex analyses using a clear, simple language;
3) The ability to transfer knowledge within a working group and tackle new knowledge and problems.
career opportunities:
- Financial and insurance intermediaries
- Pension fund and life insurance managers
- Consulting and auditing firms
- Research centres
- Supervisory and regulatory authorities
- University (PhD)
Moreover, after furthering their training to pass the State exam, graduates may register with the Professional Board of Actuaries.
Risk manager
function in a professional context:
This professional figure plays a technical role, developing financial risk management strategies and measures.
The main functions are to:
a. Break down both traditional and modern financial products (structured products and derivatives) into exposures to
a set of risk factors (risk mapping);
b. Develop and apply risk measuring techniques and report to the decision makers in the organisation, including
financial intermediaries (as a whole or as a business unit), non-financial companies and retail customers;
c. Design static and dynamic risk hedging strategies and techniques to measure the hedge effectiveness in order to orient choices;
d. Design simulation techniques and stress test analyses of risk management systems under extreme conditions.
These functions may be performed directly, or as the coordinator of a working group, either in-house or as consultant or regulator.
competencies associated to the function:
The specific skills of a risk manager include principally:
1) In-depth knowledge of the working of markets and of products in terms of organisation
and operations in order to be able to assess potential misfunctionality;
2) In-depth knowledge of the principles of mathematical finance, particularly concerning the breakdown of
products into their elementary components (replicating portfolio), in order to identify risk factors;
3) Knowledge of mathematical, statistical and econometric tools and the concept of probability, to estimate the distribution of risk factors and profits and losses;
4) Knowledge of database architecture for storing and searching information to retrieve data on
portfolio securities to be analysed and the corresponding market data for the evaluation of risk.
In addition to this knowledge and self-learning and lifelong learning skills, graduates will possess
the following transversal skills:
1) The ability to organise the learning process in order to tackle new problems, which represents the typical working condition of the risk manager;
2) The ability to organise a working group, assigning tasks and problems for both routine risk measurement and in order to solve new problems under tight deadlines;
3) The ability to simply and clearly communicate risk factors and their relevance, along with the possible hedging alternatives available to the user, to audiences of both a top managers and retail clients.
career opportunities:
- Financial and insurance intermediaries
- Consulting and auditing firms
- Supervisory authorities
- Non financial companies with financial management activity
- University (PhD)
Asset manager
function in a professional context:
This professional figure plays the role of a technical specialist dealing mainly with investment strategies for individual investors and fund managers.
The main functions are to:
a. Design quantitative strategies to choose investments, both as passive managers
and as active portfolio managers using both stock-picking and market-timing techniques;
b. Use the most common Bayesian techniques to merge different sources of information, from historical to implied and to that provided by analysts;
c. Design products with capital or return guarantees and develop the relative asset-liability management (ALM) techniques;
d. Design dynamic long-term portfolio management techniques, in order to manage pension funds and life insurance policies;
e. Design exchange risk hedging techniques and generally the use of derivatives to improve passive replication
of an index or the risk-return features of a long-only portfolio.
These functions may be performed directly, or as the coordinator of a working group, either in-house or as consultant or regulator.
competencies associated to the function:
The specific skills of an asset manager include principally:
1) In-depth knowledge of investment products and their use for
the implementation of strategies;
2) Knowledge of econometric and statistical techniques, particularly Bayesian techniques for merging information from different sources;
3) Knowledge of the principles of macro and micro economics, and how to use them to develop investment ideas;
4) Knowledge of statistical and econometric software used to produce forecasts and analyses of the general economy, industrial sectors and firms.
In addition to this knowledge and lifelong learning skills, graduates will possess appropriate transversal skills
concerning:
1) The ability to organise individual tasks and working groups to analyse scenarios for developing investment ideas (views) and represent them hierarchically in terms of probability;
2) The ability to clearly and simply explain investment ideas and how these are transformed into the
recommended financial position;
3) The ability to gather information on economic crises and the exposure of the portfolio to several risk factors.
4) In-depth knowledge of the investment products available on the market and their correct use.
career opportunities:
- Asset management companies (SGR - Società di Gestione del Risparmio)
- Banks and insurance companies
- Independent consulting services
- Supervisory authorities
- Private equity companies
- Family offices
- University (PhD)
