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Alternative Market Briefing

Using machine learning to capture commodities outperformance

Thursday, March 03, 2022

Rotella Capital Management has a new look. The firm, now known as Rotella Qdeck, is reimagining itself with the aid of new technology and a new platform for investors.

The platform is the culmination of two years of work Rotella has done to refine and improve its trading programs and investor offerings. In the fourth quarter of 2018, Rotella implemented machine learning models across the entire spectrum of Rotella funds. Today, approximately 70% of the programs use machine learning models.

As markets continue to muddle through pandemic-related uncertainty and now significant global geopolitical threats, commodities are outperforming. Commodities can be used as a hedge against inflation, which has driven some of the outperformance in recent months. Now as geopolitical concerns put pressure on global energy supplies, oil prices have hit new highs.

Rotella Qdeck's ML Commodity Program, a new program for the firm, uses a combination of proprietary momentum and risk management signals to trade these trends dynamically. The strategy targets 10-12% realized volatility and relies on unique trading algorithms that trade across asset classes including crude oil, gasoline, natural gas, gold, silver, copper, corn, soybeans, and wheat.

Alongside this strategy, Rotella Qdeck has created a commodities micro-strategy, which uses CME micro futures to maintain limited positions of up to $50k. From there, the strategy trades very granular positions within commodities markets. The strategy trades within the crude oil, natural gas, gold, silver, copper, corn, soybeans, and wheat markets.

During the upcoming Small Mangers Big Alpha Webinar, Kemp Nicklin of Rotella Qdeck will discuss both of these strategies in-depth and provide views on what investors may be able to expect in commodities markets this year. Registration is free.

Upcoming webinar:

Small Managers - BIG ALPHA Episode 7

Episode 7 of this ground breaking webinar series presents you another carefully screened panel of investment managers:

Bas Emmerig, Savin Funds
Nikos Kargadouris, Balliol Road
Laurent Jeanmart, Katch Investment Group
• Kemp Niklin, Rotella Capital Management

When: Tuesday, March 8th 2022, at 10:30 am ET
Free registration: www.opalesque.com/webinar/


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