The scene is similar at every global investment firm – a trading desk with multiple monitors and portfolio managers and traders working to synthesize the various forms of data into alpha for their investors. On many of those screens are various quantified data points displayed in tables or charts. On a few of those monitors is an abundance of text, generally news, an unquantified set of critical data. How can this large amount of textual data be integrated effectively into the highly quantified, analytic and algorithmic process of investment selection and trading to drive alpha?
The answer is to transform this textual big data into quantified insights. This transformation enables the effective integration of news into the investment selection and trade implementation process; in turn generating alpha for investors. To identify new investments or trading opportunities an intelligent system was needed to help sift through the over 30,000 articles published each day and quantify, thereby making it actionable, relevant news for an existing portfolio of stocks and the overall investment selection, trading strategy and risk management process.
Over the course of the last 17 years our team has discovered through focused research with hundreds of individual traders/investors, hedged funds, institutional money mangers and asset management firms that these are the primary challenges when integrating news into the investment lifecycle:
- Which financial news is most important to my portfolio of investments or trading today?
- Do particular types of news impact my investment portfolio or trading strategy?
- Are there trading or investment opportunities that are hidden in all the news?
- How can I add market news sentiment analysis to an existing investment selection process?
- How can I add market news sentiment data to trading models to potentially enhance returns?
- How can news be made a measurable entity and therefore monitored with more precision and acted on with greater certainty?
RelateTheNews is a key component of giving hedge funds, financial institutions, investment professionals, and individuals a competitive edge, and driving alpha for their global investors. RelateTheNews sifts through all the sources of news and analysis so that news becomes relevant and actionable to the trading, portfolio risk management, and investing process for global investment firms.