Mike Nigro, the Head of Client Solutions Research at Two Sigma, takes us through a bacon cook-off adventure to illustrate the importance of evaluating investment performance in excess of well-known factors. Make sure you have some bacon around because you’ll be craving it when you finish reading the article.

In investing, and in life, you do not always get compensated for taking risk. Therefore, it is important to not only understand the risks in your portfolio, but also to determine which of those risks you are getting paid to take and which you are taking without any compensation.

We discuss how the Occam's razor principle can be applied to investment decisions, namely around asset allocation and manager evaluation.

We use an illustrative example to demonstrate that the “alpha” of a manager may be lower than initially expected.

In investing, the main drivers of risk in institutional portfolios are typically the macro factor risk exposures. While selecting individual securities may add value on the margin, asset allocation generally ...

This post explores how a factor-based approach can help investors uncover overlapping risks in portfolios and improve diversification.

Venn uses the Two Sigma Factor Lens to analyze how the SG Multi Alternative Risk Premia Index’s factor exposures and residual may have contributed to its poor performance in 2018.

We demonstrate how a two-step approach to factor analysis can enhance the interpretability and accuracy of factor analysis.

We demonstrate the Two Sigma Factor Lens’s functionality by using it to examine four different types of public funds.