How to Become a Quantitative Analyst

What is a quantitative analyst? 

Quantitative analysts are financial professionals who develop and implement the various mathematical models used by investment banks, hedge funds, and other financial firms to analyze the markets, price assets, make investment decisions, manage risk, and measure performance. They work in the front, middle, and back offices of these companies, with the front office being closer to the clients and trading, the middle office working on market operations and risk management, and the back office being focused on clearing and compliance.

What does a quantitative analyst do?

Quantitative analysts are highly skilled in the mathematics, programming, and analytical methods behind quantitative finance. They study individual assets, asset classes, and financial products, including derivatives, to uncover investment opportunities and generate alpha, while managing risk effectively. The skills and the quantitative mindset are in high demand throughout the world of banking and finance, as well as in insurance, economics, and consulting.  According to quant recruiters the job prospects for quants are excellent and are expected to be very good in the years to come. 

Naturally, the roles and responsibilities for quant analysts varies by the type of employer, but typically, such quants will be engaged in developing and implementing quantitative models and analytical tools; performing statistical analysis for pricing, modeling, and risk management; analyzing market trends to support investment concepts; maintaining, enhancing, and testing mathematical models; collaborating with other quants, portfolio managers, and traders to design and implement optimal investment strategies; and presenting data and performance results to senior management and to clients.

Quantitative analyst skills

Quant analysts generally develop deep expertise in specific functional areas (e.g., pricing, trading, portfolio or risk management) and for particular asset classes (e.g., equities, fixed income, derivatives, and structured products). Their skills will encompass three main areas: 

  1. The technical domain: Programming in Python, C, C++, or C#; knowledge of software packages like MATLAB, R, SAS; and database management. Machine learning and data science skills are also in demand and part of the technical skill set for quants.
  2. The mathematical domain: A solid understanding of differential, integral, and stochastic calculus; linear algebra; numerical methods; probability and statistics; and econometrics, as well as how to construct and implement mathematical models in the context of the financial markets.
  3. The financial domain: Modern Portfolio Theory; equities; fixed income; derivatives; structured products; commodities; trading (traditional to high frequency); and in some cases, economics and econometrics. 

Quant analysts should possess good business skills, including the ability to communicate effectively with colleagues, senior management, and clients.

Quant education requirements 

For those interested in progressing in quant finance, a master’s degree in mathematical or computational finance, operations research, or financial engineering is often a consideration. However, employers have a strong focus on applied work and relevance to the financial markets, so professional certifications are valued highly and often preferred. This is good news for people who are working full time and do not wish to leave their jobs to pursue an advanced academic degree. 

The Certificate in Quantitative Finance (CQF), delivered by Fitch Learning, gives delegates a solid understanding of mathematical modeling, pricing, portfolio construction, machine learning, and risk management. The program provides a strong foundation in both the theory and practice behind the most prominent quant models used in industry. Each lecture provides a detailed explanation and critique of the models, showing their strengths, shortcomings, and the alternative approaches that have been developed over the years. The curriculum also includes two modules dedicated to data science and machine learning.

The CQF also helps delegates develop proficiency in Python programming with weekly Python Labs where delegates practice building and implementing the models they have learned in the lectures. If delegates are new to Python at the start of the program, they can learn Python from scratch with the Python programming primer. At the end of the program, each student completes a final practical project, where they implement and analyze a real-world quantitative model to ensure they can apply their new skills to the most current industry problems. As many CQF alumni note, the program is a transformational experience that has played a key role in their professional development. 

Download a brochure today to find out more about the program and how it could enhance your quantitative finance skills.

Find out more about careers in quantitative finance

If you are interested in becoming a quantitative analyst, explore the new CQF Careers Guide to Quantitative Finance. Learn more about the skills needed and average salary you can earn in North America, Asia, and Europe for key career paths in quantitative finance.