DCM Systematic discusses its investment approach

19 Nov 2024 - Press

DCM Systematic: Scientific methods and AI power applied to"Non-Trend" CTA strategy

The principals of DCM Systematic discuss their innovative approach to systematic investing that deliberately differs from traditional trend-following CTAs.

Unlike conventional CTAs that may cluster around similar trend-following signals, DCM has developed a multi-strategy architecture called Diversified Alpha that is designed to exploit behavioral, relative value, and mean-reversion opportunities. Diversified Alpha is intended to provide an additional source of diversification, although diversification does not assure a profit or protect against loss.

Led by a seasoned team combining Dr. Anthony Dearden and Dr. Jérôme Callut's expertise from BlueCrest with Gaetan Maraite's senior executive experience from Pictet, DCM Systematic leverages deep academic credentials in machine learning and robotics to engineer a sophisticated yet practical investment approach.

The team strives to apply its scientific background both in its approach to its investment and by adopting a risk management framework designed to mitigate portfolio risk during periods of elevated market stress.

By typically maintaining between 30 and 35 distinct strategies across multiple asset classes and timeframes, Diversified Alpha seeks to target return streams that aim to achieve relatively low correlation to traditional trend-following strategies, although correlations and returns vary over time, while historically keeping drawdowns contained below one standard deviation. Their disciplined approach to research and implementation supports a continuous evolution of their models while maintaining strict risk controls.