RavenPack, a provider of news analytics, and Aleri, a provider of complex event processing (CEP) technology, have partnered to develop a system in which trading algorithms can react instantly to news events.
"News analytics are a rich source of trading signals to the largest and most successful quantitative fund managers," said Don Williams, Managing Director of RavenPack.
RavenPack's computational linguistics and analytics platform delivers news as data, allowing users to quantitatively analyze news events and their correlation with financial instruments. Within milliseconds, RavenPack is said to process news stories from thousands of global media sources and turn the news into numbers that are automatically delivered as news-derived factors into Aleri CEP-based trading models. Aleri CEP responds to shifts in public sentiment based on news, enabling the immediate creation of orders or changes to prices or order amounts.
"We have seen a lot of interest from customers in factoring news into trading algorithms, but the challenge has been the automated analysis of news " which is exactly what RavenPack has addressed," said Jeff Wootton, VP of product development. "Clients can use the data modeling capabilities of the Aleri CEP technology to rapidly test and launch new trading and risk applications that are driven by the RavenPack news analytics in a fraction of the time required when using traditional systems and techniques."
By integrating with Aleri's CEP engine, RavenPack has created a library of turnkey news factor models that can be used out of the box or as a starting point for further customization of a clients' proprietary trading approach. The joint RavenPack/Aleri integrated platform includes real-time analysis of key news events that are likely to impact market prices, allowing clients to more easily incorporate news into their trading and risk management strategies.