Research preview

Small‑cap equities have recently widened their gap against the Nasdaq‑100, creating a historic relative‑performance divergence. For quantitative traders this gap is a signal that can be examined with risk‑adjusted metrics, factor models, and systematic entry‑exit rules. The following article dissects the phenomenon, links it to academic finance concepts, and outlines a practical workflow for exploiting the mis‑pricing. Why the Gap Matters The widening spread between a broad small‑cap index and the technology‑heavy Nasdaq‑100 is more than a headline. Small‑caps traditionally offer higher average returns in exchange for greater volatility. When the spread widens to unprecedented levels, it suggests either a temporary market dislocation or a shift in risk premia. Quantitative...