One news sentiment provider is all you need – not really(Part 2)

Last week we began a discussion on the assumption that more than one provider of alternate market data is unnecessary. The reality is that the proprietary analysis process applied to common source material, such as news, creates unique signals as output. These unique signals can be additive in their effects and therefore multiple providers is of great value.

The ability and necessity to differentiate the analysis algorithms thereby creating different signaling output leads us to the remaining question – “What makes you different?”. Responding to this question is easily the largest challenge we face. The challenge arises from the fundamental fact that the algorithm in the middle of our sentiment engine which creates RelateTheNews’ unique Insight Index® is proprietary. We have found that discussion of our general architecture or the real-time nature of our data is an answer that suffices for some of our prospective clients. For some, even more detail is necessary to aid in answering the real meat of this question. These questions challenge and inspire us to work even harder to provide reasonable answers. For example over the last 90 days we have diligently created a sample quantitative investment strategy using solely RelateTheNews data to demonstrate the possible alpha returns available. The demonstration of an effective trading strategy with backtested data of one component of our proprietary news sentiment signals has truly addressed this differentiation question. Additionally, our data sciences team has also begun a process to further detail why the algorithmic analysis decisions we have made generate meaningful signals from business news. While that full process will be a post of its own; a preview is also valuable in answering this question. The data science team has re-analyzed over 82,000 financial news articles for a one year period using industry standard natural language processing techniques (NLP) as well as industry research to assess the value of the decisions in the RelateTheNews sentiment analysis engine. While answering the question of how are we different from other sentiment providers remains challenging – our team will continue to work diligently with clients and prospective clients to create meaningful answers to these questions so that our data can be deployed in their investment processes to drive alpha.

For all institutions seeking to employ alternate market data it is critical to understand that the value is not in the inputs but rather the unique signals generated by each provider’s proprietary analysis algorithms. We look forward to answering these questions as well as demonstrating the alpha generating capability of RelateTheNews market news sentiment data as the evolution of alternative market data for quants and asset managers continues.


For all institutions seeking to employ alternate market data it is critical to understand that the value is not in the inputs but rather the unique signals generated by each provider’s proprietary analysis algorithms. We look forward to answering these questions as well as demonstrating the alpha generating capability of RelateTheNews market news sentiment data as the evolution of alternative market data for quants and asset managers continues.