The analysis of financial markets faces great challanges. Usually the markets are hard to analyze and predict and common technical analysis
techniques are insufficient.
Trends keep changing constantly and it's not easy to predict the changes. There are heterogenous sources of financial data. Some are common and official, like stocks exchanges.
but some are more obscure, like social networks and news.
Brainstorm Private Consulting has a range of offerings in mining financial data, detection of trends (like bull and bear markets) and prediction of
market/stocks behavior, like the future direction of a specific stock.
In addition, we provide skills in data mining and knowledge discovery, anomaly detection and classification to identify
important events in the past and present
that can help to predict the future.
We can provide a deep financial analysis capability blending a range of innovative techniques and tools to provide high quality intelligence
led solutions.
Detection of trends in stock markets
Financial trens analysis is an aspect of technical analysis that tries to predict the future movement of a stock based on past data.
Trend analysis is based on the idea that what has happened in the past gives traders an idea of what will happen in the future.
Trend analysis tries to predict a trend like a bull market run and ride that trend until data suggests a trend reversal (e.g. bull to bear market).
Trend analysis is helpful because moving with trends, and not against them, will lead to profit for an investor.
There are three main types of trends: short-term, intermediate-term and long-term.
In this case study, we will survey the solutions that we provided to a medium hedge fund, to identify trends in the S&P 500 based on years of historical stock data.
Portfolio analysis and hedging
Portfolio analysis is a study of the performance of specific portfolios under different circumstances.
It includes the efforts made to achieve the best trade-off between risk tolerance and returns.
The analysis of a portfolio is usually conducted by a professional who utilizes specialized software.
Portfolio analysis involves quantifying the operational and financial impact of the portfolio.
It is vital to evaluate the performances of investments and timing the returns effectively.
The analysis of a portfolio extends to all classes of investments such as bonds, equities, indexes, commodities, funds, options and securities.
Portfolio analysis gains importance because each asset class has peculiar risk factors and returns associated with it.
Hence, the composition of a portfolio affects the rate of return of the overall investment.
Hedging is the practice of taking a position in one market to offset and balance against the risk adopted by assuming a position in a contrary or opposing market or investment.
In this case study, we will survey the portfolio analysis and hedging solutions that we provided to a large hedge fund.