What financial techniques and mathematical models does Floodlight employ?
Floodlight uses the full power or many financial models and modeling techniques that are proven to work well. Some of the models and techniques we use are mean-variance optimization, efficient frontiers, Monte Carlo analysis, Value at Risk and stress tests, to name a few. We’re also the first to admit that some models have limitations and are based on assumptions, which is why we incorporate many different approaches to determine the most robust and reliable solution. We’ve also we’ve built an entire module that focuses on assessing the validity of the common assumptions that are used by many modeling techniques – please see the question “What financial assumptions are made by Floodlight?” for more information. And remember, this all happens ‘under the hood’ – all you’ll see is a simple process through a well-designed interface that hides all the complexity.
