Lumida Wealth Unveils New Quantitative Strategies After 7-Month Out-of-Sample Validation

Lumida Wealth, led by Co-Founder and CEO Ram Ahluwalia, CFA, has announced the development of new pre-built, factor-based quantitative strategies. The firm revealed that these strategies, encompassing both long and short positions, have undergone a rigorous seven-month "out-of-sample" seasoning period since their design in February. This announcement signals a significant step in Lumida's commitment to data-driven investment solutions.

Ram Ahluwalia, a recognized investment professional, co-founded Lumida Wealth as a digitally native, SEC-registered investment advisor specializing in alternative investments and digital assets. The firm aims to provide an endowment-style approach to wealth management, integrating top-down themes, bottom-up analysis, and quantitative insights. Ahluwalia's expertise blends traditional investment analysis with quantitative modeling, favoring a 'quantamental' approach.

Factor-based investing is a strategy that selects securities based on specific attributes, or "factors," historically associated with higher returns. Common factors include value, momentum, quality, and low volatility. These strategies seek to enhance diversification, generate above-market returns, and manage risk by systematically tilting portfolios towards or away from these characteristics.

The "out-of-sample" testing period is a critical component in quantitative finance, evaluating a model's performance on data it has not previously encountered. This method is essential for preventing overfitting, a common pitfall where a model performs well on historical data but fails on new, unseen information. The seven-month seasoning period suggests a robust validation process to ensure the strategies' true predictive power and adaptability to real-world market conditions.

Lumida Wealth's introduction of these long and short-side strategies indicates a move to offer more dynamic and potentially resilient investment options. By subjecting these strategies to extensive out-of-sample testing, the firm aims to provide clients with increased confidence in their financial future. This approach aligns with Lumida's mission to offer innovative investment strategies in a challenging market environment.