Advantages of Quantitative Analysis

  • It depends heavily on numbers and statistics: Because quantitative analysis frequently examines real data, it is simple for investors to understand and compute.
  • From straightforward to sophisticated methods, all are available: Simple methods, including determining a company’s PE ratio, are accessible to even newcomers. Advanced investors, meanwhile, utilize quantitative analysis to examine far bigger and more intricate sets of data.
  • Cost-effective: The information that an individual could use for quantitative analysis is frequently made freely available on a variety of investment platforms.

Disadvantages of Quantitative Analysis

  • Not all things are reducible to numbers: The quantitative approach ignores factors like investor and customer mood, managerial calibre, and corporate culture that are hard to quantify.
  • It is perfect every time: Investors can use quantitative analysis as one method to forecast future outcomes, but even if they spot a tendency that resembles one from history, there is no assurance that the current will unfold in the same manner.