Reporter: SHEN Ziwei
With the increasing complexity and globalization of financial markets, risk management has become an indispensable core area for financial institutions. The introduction of quantitative models and algorithms provides a scientific and systematic solution for financial risk management, significantly enhancing the efficiency and accuracy of risk identification and control. In this industry where challenges and opportunities coexist, CAI Xi, an expert deeply rooted in the field of quantitative trading and risk management with numerous achievements, has become a recognized leader in the industry due to his outstanding technological innovation capabilities and profound industry experience.
In 2021, CAI Xi’s independently developed technological achievement, “Portfolio Optimization Software Based on Risk Quantification V1.0”, made a significant impact. This financial software, by integrating advanced risk assessment models and intelligent algorithms, can quickly identify potential investment opportunities and risk points in the ever-changing financial market, greatly improving the efficiency and precision of investment decisions. Compared to traditional manual analysis or basic quantitative models, this software not only significantly reduces the uncertainty in the investment process, effectively avoids market volatility risks, but also ensures the long-term stable growth of assets through intelligent adjustment of the investment portfolio. After its initial release, the software quickly demonstrated immense application value. During the global economic turmoil in 2022, the software accurately predicted the downward trend in some markets and timely adjusted the investment portfolio, effectively reducing clients’ capital losses. Additionally, the software can optimize the investment portfolio in real-time according to market changes, enabling investors to maintain stable returns in different market environments. This high level of adaptability and precision has earned widespread acclaim from the market and the trust of investors, making it an indispensable investment aid for many financial institutions and high-end investors.
Beyond his outstanding contributions in technology, CAI Xi actively participates in financial industry exchanges and research. For instance, in August 2024, he participated in the “Project Eagle” Finance Research Program of CITIC Securities South China Company Limited Zhuhai Branch, a valuable experience of deep intellectual collision and joint exploration of financial market mysteries with industry elites. On the platform of the “Project Eagle”, CAI Xi engaged in in-depth exchanges with numerous outstanding figures from the financial sector, discussing the latest trends and future developments in the financial market. They had lively discussions on topics such as changes in yield curves, adjustments to the Federal Reserve’s monetary policy, and changes in the global economic environment. CAI Xi delivered a brilliant speech on the topic of “Federal Reserve Interest Rate Hike Expectations and the Market”, offering unique insights. He believes that the the Fed will lower rates to roughly 4.25% and then pause. Ultimately, the Fed will arrive at a 3% neutral rate (nine 25bp cuts) over 18 months. Lowering interest rates not only helps alleviate government fiscal pressure, facilitating financing for massive deficits, but also benefits the risk asset market. Reduced financing costs and a positive yield curve will revitalize debt and equity markets, maximizing benefits for financial institutions, real estate assets, high-yield bonds, and potential homebuyers. CAI Xi broadened his academic horizon through this experience, accumulated valuable experience, additionally, it provided a continuous source of inspiration for his future technological innovation.
From June 2022 to May 2023, CAI Xi was also honored to lead the national key research project “Research on Risk Management of Financial Derivatives Trading Based on Quantitative Models”. This project not only focuses on the latest advancements and explorations of quantitative models in the risk management of financial derivatives trading but also aims to build a more precise, systematic, and efficient risk management system to adapt to the increasingly complex and volatile financial market environment. CAI Xi conducted a comprehensive and in-depth analysis of the unique characteristics, potential risk points, and market trends of the financial derivatives market. Through extensive data collection, careful design, and implementation of numerous empirical studies, CAI Xi successfully revealed the unique advantages and limitations of quantitative models in risk identification, assessment, and control. Based on this, he proposed a series of forward-looking and innovative risk management strategies. These strategies not only cover the optimization of risk warning systems and the establishment of dynamic risk adjustment mechanisms but also include new risk quantification methods based on big data and artificial intelligence technologies, providing new ideas and tools for risk management practices in the financial derivatives market. CAI Xi’s research for this project provided highly valuable reference opinions for relevant regulatory authorities in formulating regulatory policies for the financial derivatives market and preventing systemic risks. The widespread dissemination and application of the research results from this project led by CAI Xi will undoubtedly further promote the development of China’s financial derivatives market towards greater standardization, internationalization, and intelligence, making significant contributions to the stability and prosperity of the financial market.
CAI Xi’s pioneering practices in the field of quantitative trading and risk management have not only significantly enhanced the core competitiveness of China’s financial technology on the global stage but also laid a solid foundation for the financial industry to move towards a high-quality development stage. By deeply exploring the potential of quantitative trading technology and combining cutting-edge risk management strategies, CAI Xi’s work has greatly optimized the operational efficiency of the financial market, promoted the deep integration and innovative application of financial technology, and demonstrated China’s outstanding achievements and forward-looking vision in the field of financial technology innovation.
