An Example Of A News-Based Trading Strategy

There are only a very limited number of funds employing an investment strategy which relies on automated  news gathering. It is still early days in the exploitation of this rich data source, and the spoils of the early adopter are available yet.  So the managers are reluctant to publicly disclose what they are doing and how they are doing it. Plus such media exploitation is typically going on as a feed to a broader strategy or as a sub-fund within a larger multi-strategy investment firm. Unless the approach is the main event at a fund it is unlikely to be discussed in any detail with investors.

The attached paper does not lay out an investment strategy that is being deployed by a large hedge fund, but it does give a flavour of how the sophisticated technology available can be applied. The paper is published on this website to help illustrate one way of using analytical tools to interrogate mass media raw inputs to produce a trade-able investment strategy.

The paper was recently presented at a Citi event in London and at a seminar the technology providers, Deltix, hosted in New York.


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