Adaptive Quantum Compass (AQC)
The Engine of Institutional Risk Control
The Adaptive Quantum Compass (AQC) is Kallan Capital's flagship quantitative trading strategy, engineered to navigate the extreme volatility of digital assets like Bitcoin (BTC) and Solana (SOL). It moves beyond static rules to deliver a computationally adaptive, institutionally compliant framework for systematic capital preservation.
Hierarchical Risk Filter: The AQC's core strategic strength lies in its Hierarchical Decision Matrix. This structure ensures that signals from fundamental Tier 1 Macro Indicators (like global yields and the US Dollar Index) possess the necessary authority to override all lower-tier, opportunistic signals.
Systemic Risk Override: It incorporates explicit, hard-wired circuit breakers designed to enforce capital preservation during periods of market panic. Extreme, pre-defined thresholds for market fear (VIX) and bond market stress (MOVE Index) trigger immediate liquidation of all crypto holdings, preempting peak capitulation and minimizing maximum drawdown risk.
Dynamic Intelligence and Precision Capital Allocation
The AQC is a self-optimizing system that continuously learns and adapts its risk posture based on current market conditions.
Adaptive Weighting: The strategy employs Market Sensitivity Weighting (MSW) to dynamically adjust the influence of each market indicator based on its recent quantified predictive power. This ensures the model is always listening to the signals that are currently driving the market.
Predictive Volatility Modeling: The AQC utilizes advanced forecasting models to derive Predictive Volatility Surfaces (PVS). This predicted volatility is used directly in a formal Value-at-Risk (VaR) framework for precise, risk-adjusted position sizing, guaranteeing that risk is only deployed when signal conviction is high.
Behavioral Anomaly Detection: The system features a Behavioral Anomaly & Liquidity Shock Detector that acts as an instant "smoke detector". It flags statistically significant breakdowns in expected market correlations and sudden liquidity shocks, forcing an immediate reduction in risk or pause in new entries.
Event-Driven & Disciplined Execution
The AQC's execution logic is event-driven and engineered for both efficiency and security.
Unlock Impact Modeling: For high-beta assets like SOL, the strategy employs an advanced Unlock Impact & Absorption Dynamics (UIAD) module, which quantifies the diminishing impact of large supply releases over time, enabling nuanced position management.
Optimized Execution: For large directional entries, the system employs algorithms like VWAP/TWAP Slicing to minimize market impact and slippage. During high-volatility exits, it switches to immediate execution orders to guarantee speed and capital preservation.