Target Volatility Sizing - Quant Researcher Interview Question
Difficulty: Medium
Category: machine_learning
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Topics: volatility, risk-management, pandas, finance
Problem Description
Volatility targeting is a systematic risk management technique that adjusts position sizes inversely to an asset's realized volatility to maintain a constant level of portfolio risk. By scaling exposure based on recent market turbulence, quantitative strategies can stabilize returns and manage drawdowns effectively across changing market regimes.
Task
Implement a function solution that calculates the target position weights for a single asset to achieve a specific annualized volatility target.
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