What is M3 ?
Mosaic M3 analyzes elements of volatility and price flux to generate adaptive momentum, mean reversion and delta neutral daily trading models with integrated limit stops that consistently outperform buy and hold returns.
Mosaic answers the risk/reward question with a quantitative platforms focused on data driven solutions utilizing a series of progressive risk management algorithms to examine the robustness of model components on a daily basis and then commits capital to the highest probability trades only, or remains in cash.
M3 models may rotate positions on a daily basis or hold longer term positions depending on stability of the current trend.
An AUTO-STOP filter and the calculation of "best odds" limit stops are embedded in M3 models to mitigate capital drawdown.
M3 models trade Long only (inverse ETF/ETNs trade Long to create Short positions) and enable traders to craft their own comfort level with risk exposure by providing visual chart overlays of several technical stops, including polynomials and equity curve tracking that may argue for either vested or cash positioning.
While a risk management retreat to cash may sometimes produce lost "opportunity costs" during short term market surges, the over-riding goal of Mosaic is minimizing risk exposure, not maximizing returns.
How Mosaic Works
The premise of Mosaic modeling is that market momentum engineering can significantly reduce risk exposure, thereby straightening the equity curve of an investment portfolio and avoiding the uncertainty associated with timing directional market moves.
While the potential yields of such an approach are somewhat capped by the limits of playing only price and volatility factors, the strategy offers maximum protection against capital drawdown resulting from news driven events as well as economic surprises that typically produce situations of extreme market volatility. . .and risk.
Mosaic is a hybrid application of Tactical Asset Allocation (TAA), an asset management approach widely used by money managers that periodically rotates capital into market sectors that are exhibiting relatively superior performance. What sets Mosaic M3 apart from other TAA models is the use of a volatility based component that is historically forward looking and which helps to deliver a consistent revenue stream without the need to make wild and frequent adjustments in position sizing and portfolio components.
While the potential yields of such an approach are somewhat capped by the limits of playing only price and volatility factors, the strategy offers maximum protection against capital drawdown resulting from news driven events as well as economic surprises that typically produce situations of extreme market volatility. . .and risk.
Mosaic is a hybrid application of Tactical Asset Allocation (TAA), an asset management approach widely used by money managers that periodically rotates capital into market sectors that are exhibiting relatively superior performance. What sets Mosaic M3 apart from other TAA models is the use of a volatility based component that is historically forward looking and which helps to deliver a consistent revenue stream without the need to make wild and frequent adjustments in position sizing and portfolio components.
Integrated Price & Volatility Analytics
Mosaic M3 does not attempt to forecast trends but uses quantitative modelling to identify collapsing or expanding volatility cycles and to exploit those situations of low risk to increase capital exposure within the models. Mosaic is not designed to predict when those investment situations will occur but does provide an early warning system for likely setups.
What M3 does accomplish is the identification of periodic situations of price and volatility divergence ("Skew") which exceed normal statistical thresholds. The path of of these opportunistic investment sweet spots is tracked graphically within M3 so situations offering the highest odds for profitable infusions of capital are easier to identify and capture.
M3 models can be traded either pre-close, end of day or in the after hours session.
Optimum returns are typically achieved by traders who have the time and inclination to trade 10 minutes prior to the market close and who exercise end of day risk money management stops as posted.
The M3 tactical approach assumes market regimes are constantly in flux and therefore does not endorse long term positions.
What M3 does accomplish is the identification of periodic situations of price and volatility divergence ("Skew") which exceed normal statistical thresholds. The path of of these opportunistic investment sweet spots is tracked graphically within M3 so situations offering the highest odds for profitable infusions of capital are easier to identify and capture.
M3 models can be traded either pre-close, end of day or in the after hours session.
Optimum returns are typically achieved by traders who have the time and inclination to trade 10 minutes prior to the market close and who exercise end of day risk money management stops as posted.
The M3 tactical approach assumes market regimes are constantly in flux and therefore does not endorse long term positions.
