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Medium · machine_learning · Quant Researcher interview question · linear_regression, statistics, numpy, alpha_research
Feature neutralization is a critical preprocessing step in quantitative finance used to isolate "pure alpha" by removing linear exposure to common risk factors like the market. This process involves regressing a raw trading signal against a risk factor and extracting the residuals, ensuring the strategy bets on unique insights rather than broad market movements. Task Implement a function solution(signal, market) that neutralizes a raw alpha signal with respect to a market risk factor using line