Investment research and trading
Discussion of how text analytics technologies are used in trading and investment research. (As opposed to a discussion of the services we ourselves provide to investors.) Related subjects include:
Text analytics application areas typically fall into one or more of three broad, often overlapping domains:
- Understanding the opinions of customers, prospects, or other groups. This can be based on any combination of documents the user organization controls (email, surveys, warranty reports, call center logs, etc.) — in which case — or public-domain documents such as blogs, forum posts, and tweets. The former is usually called Voice of the Customer (VotC), while the latter is Voice of the Market (VotM).
- Detecting and identifying problems. This can happen across many domains — VotC, VotM, diagnosing equipment malfunctions, identifying bad guys (from terrorists to fraudsters), or even getting early warnings of infectious disease outbreaks.
- Aiding text search, custom publishing, and other electronic document-shuffling use cases, often via document augmentation.
For several years, I’ve been distressed at the lack of progress in text analytics or, as it used to be called, text mining. Yes, the rise of sentiment analysis has been impressive, and higher volumes of text data are being processed than were before. But otherwise, there’s been a lot of the same old, same old. Most actual deployed applications of text analytics or text mining go something like this:
- A bunch of documents are analyzed to ascertain the ideas expressed in them.
- A count is made as to how many times each idea turns up.
- The application user notices any surprisingly large numbers, and as result of noticing pays attention to the corresponding ideas.
Often, it seems desirable to integrate text analytics with business intelligence and/or predictive analytics tools that operate on tabular data is. Even so, such integration is most commonly weak or nonexistent. Apart from the usual reasons for silos of automation, I blame this lack on a mismatch in precision, among other reasons. A 500% increase in mentions of a subject could be simple coincidence, or the result of a single identifiable press article. In comparison, a 5% increase in a conventional business metric might be much more important.
But in fairness, the text analytics innovation picture hasn’t been quite as bleak as what I’ve been painting so far. Read more
|Categories: Attensity, BI integration, Investment research and trading, SPSS, Text mining, Voice of the Customer||9 Comments|
I’m not at Gartner’s Event Processing conference, but there seem to be some interesting posts and articles coming out of it. Seth Grimes has one on Reuters’ integration of text mining and event processing, including sentiment analysis. Well worth reading. Lots more detail than I’ve ever posted on similar applications.
|Categories: ClearForest/Reuters, Investment research and trading, Sentiment analysis, Text mining||4 Comments|
As per this job listing, at least one “major NYC investment bank” plans to do text mining on a proprietary trading desk.
The successful candidate will mine text data from numerous news sources and incorporate the information the proprietary trading systems.
I’ve been thinking for a long time that the various text mining companies doing sentiment analysis should try some public-facing (or at least multi-customer) services. Investors might love such a thing. So might marketing managers (actually, Factiva claims to be active there, at least as per their web site). And as a key part of the strategy, text mining companies selling to enterprises might brand such a site and gain massive awareness accordingly. Well, it seems that public-facing sentiment analysis sites are springing up. At least, Summize has. (Hat tip to TechCrunch.) And the text mining vendors are nowhere to be seen.
So what else is new? Read more
|Categories: Application areas, Factiva/Dow Jones, Investment research and trading, Text mining||1 Comment|
Attivio is having a house party and product rollout in the latter part of January, and details are scarce in the mean time. But here are some highlights.
- Attivio was founded in August. It has 21 people and 1 VC. The VC has invested >$6 million and committed >$12 million total.
- Attivio has ambitious plans for a fully integrated data management/real-time BI stack. It’s currently called the “Active Intelligence Engine.” Read more
|Categories: Attivio, BI integration, Investment research and trading, Lucene, Open source text analytics||4 Comments|
CEO Eric Bregand of Temis recently checked in by email with an update on text mining market activity. Highlights of Eric’s views include:
- Yep, Voice Of The Customer is hot, in “many markets”; Eric specifically mentioned banking, car, energy, food, and retail. He further sees IBM backing VotC as text’s “killer app.” (Note: Temis has a history of partnering with IBM, most notably via its unusually strong commitment to UIMA.)
- Specifically, THE hot topics in the European market these days are competitive intelligence and sentiment analysis. (Note: I’ve always thought Temis got serious about competitive analysis a little earlier than most other text mining vendors did.)
- Life sciences is an ever growing focus for Temis.
- I confused him a bit with how I phrased my question about custom publishing and Temis’ Mark Logic partnership. But he did express favorable views of the market, specifically in the area of integrating text mining and native XML database management, and even volunteered that nStein appears to be doing well.
|Categories: Application areas, Competitive intelligence, Custom publishing, IBM and UIMA, Investment research and trading, Mark Logic, nStein, TEMIS, Text mining, Voice of the Customer||1 Comment|
I’m at the Business Objects annual user conference, and had a couple of chances to talk with Inxight/text analytics folks. When I asked about areas of commercial application traction, answers were similar to those I got from Attensity and Clarabridge, but not quite the same. Specifically:
- Voice of the Customer is definitely tops.
- Some of the other applications Attensity and Clarabridge mentioned appear as well (e.g., antifraud).
- Business Objects also has a couple of customers looking at text mining as an aid to medical records, e.g. by helping to catch errors in tabular-field coding.
- There are some projects in actual investment research/analysis/trading, e.g. in correlating news announcements and stock price movements.
The Business Objects/Inxight folks also made a couple of interesting general technical points. Read more
|Categories: Application areas, BI integration, Business Objects and Inxight, Investment research and trading, Voice of the Customer||Leave a Comment|
Besides asking them technical questions, I surveyed Attensity and Clarabridge last week about text mining application trends, getting generously detailed answers from Michelle De Haaff of Attensity and Justin Langseth of Clarabridge. Perhaps the most important point to emerge was that it’s not just about particular apps. Enterprises are doing text mining POCs (Proofs of Concept) around specific apps, commonly in the CRM area, but immediately structuring the buying process in anticipation of a rollout across multiple departments in the enterprise.
Other highlights of what they said included: Read more
|Categories: Application areas, Attensity, Clarabridge, ClearForest/Reuters, Competitive intelligence, Factiva/Dow Jones, Investment research and trading, Text mining, Voice of the Customer||3 Comments|
StreamBase isn’t the only complex event/stream processing (CEP) vendor doing text processing. Progress Apama is as well. Stemming, fuzzy matching, and so on seem to happen all the time. But there’s also at least one case where they flat-out do sentiment analysis. Edit: I presume this is in the investment market, as that’s where most of Progress Apama’s business is. Read more
|Categories: Investment research and trading, Progress and EasyAsk, Sentiment analysis, Text mining||Leave a Comment|
Jay Henderson of ClearForest tells me that hedge funds are one of their more interesting growth areas. It’s about time.
I think a lot of the reason for investment firms not making more use of text analytics has been structural — Factiva, the (relatively speaking) mammoth joint venture of Reuters and Dow Jones, is forbidden by its parent companies from meeting investment firms’ needs. And that’s kind of a pity, as it’s probably the best-positioned firm to do so. It’s good to hear that the little guys are finally filling the gap.