How We Invest: Hanseatic Q Score
The key driver of our investment team’s buy and sell strategy is a dynamic, a dynamic algorithm-based analytic that generates a Q Score for every stock reflecting their performance potential.
Hanseatic’s research and development process behind the Q Score spans over two decades. The resulting quantitative process allows us to evaluate a universe of stocks based on the universe our clients are interested in and assess each stock’s strength.
The Q Score is a dynamic algorithm-based analytic for identifying strong market performers over an investment time horizon. The Q score input is a time series of stock price. Through model factors calculated from the time series, which include the exponential moving average of price, our proprietary oscillator, and other trend measures over multiple time dimensions, each stock is assigned a Q score between -9 and +9; the higher the score, the better reward/risk profile. Our investment team considers stocks with a positive Q Score as a potential buy; stocks with a Q Score of 0 are sold. Driven purely by quantitative analytics, this core part of our investment process is bias-free.
The Q Score focuses our attention on the strongest individual stocks regardless of market conditions, geographies and sectors. With the Q Score established and universe of stocks narrowed significantly, our investment team then constructs a portfolio based on client requirements and a mix of core drivers.