It’s easy to see why they saw similarities between stochastic processes and investing. For one thing, Simons, Ax, and Straus didn’t believe the market was truly a “random walk,” or entirely unpredictable, as some academics and others argued. Though it clearly had elements of randomness, much like the weather, mathematicians like Simons and Ax would argue that a probability distribution could capture futures prices as well as any other stochastic process. That’s why Ax thought employing such a mathematical representation could be helpful to their trading models. Perhaps by hiring Carmona, they
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