"As the Quant" - Monthly Q&A with Summr's Experts

As the Quant: Managing Risk in Turbulent Markets

At Summr Capital, risk management isn’t a back-office process—it’s the foundation of every strategy we deploy. In this month’s Q&A, we tackle a question we hear often: How does Summr’s quant team manage risk when volatility erupts?

Even the most advanced models can falter during market shocks. That’s why before any strategy reaches live deployment, it’s rigorously stress-tested against historical crisis scenarios—like the COVID-19 pandemic in 2020 or the yuan devaluation in 2015–16. We ask: What would happen if markets froze tomorrow? And we design accordingly.

Once in production, each strategy is protected by an adaptive volatility-targeting overlay. This system dynamically reduces exposure as volatility climbs. For instance, during the April 2025 spike, when the Cboe VIX surged to 52, our overlay cut gross leverage by nearly a third, shielding capital without exiting positions entirely.

Diversification forms our final line of defense. By building portfolios with uncorrelated signals across equities, rates, and commodities, we’re positioned to absorb shocks in one sector while maintaining stability elsewhere.

The takeaway? Quantitative investing at Summr isn’t a set-it-and-forget-it process. With disciplined stress testing, dynamic position management, and cross-asset diversification, we aim not just to endure turbulent markets—but to capitalize on them.

Submit your questions for next month’s Q&A at information@summr.tech.