Reuters and Prediction Dynamics, a trading and risk management software company, have signed an agreement under which Reuters global historical market data feed service, DataScope and Prediction Dynamics’ financial modeling platform Crucible* will be jointly marketed and sold.
The agreement brings together Reuters DataScope, a financial information service which delivers end-of-day prices, corporate actions, foreign exchange and global cross-reference information, with Prediction Dynamics’ Crucible TM, a financial prediction infrastructure platform that enables organizations to build predictive time-series models for financial markets.
The software is aimed at hedge fund and financial risk managers and research groups engaged in developing and refining quantitative trading strategies. The combination of Reuters information resources with Prediction Dynamics’ financial modeling platform aims to enable traders and risk managers to build a comprehensive quantitative framework for decision-making.
“As global institutional trading and money management operations strive to eke out higher returns in an increasingly harsh market, dependable sources of reliable, accurate data combined with sophisticated modeling tools will give smart traders an edge,” says Alenka Grealish, senior analyst at Celent Communications. “Significant opportunities for revenue increase and loss avoidance hinge on equity data integrity.”
“Investment banks, hedge funds and asset managers are looking for better ways to take advantage of the large amounts of historic data available to them today,” says Paul Donnelly, chief executive officer of Prediction Dynamics. “Crucible is based on a revolutionary new approach that uses historic data, such as that provided by Reuters DataScope, to build consistently accurate predictive financial models. The predictions produced by these models can be used to drive profitable systematic trading strategies or to actively manage financial risk.”
“Information is the foundation of good decision making,” adds Piers MacWhannell, third party relationship manager, Reuters. “Reuters DataScope provides the extensive, high-quality data that works with Crucible models to make solid volatility and asset return predictions. This bolsters Reuters aim to support its clients’ market risk activities.”
Prediction Dynamics’ Crucible is a modeling platform underpinned by a large body of mathematical and computational research. The core engines for building and analysing nonparametric multifactor models – the FactorEngine and the ModelEngine -are based on patent-pending technologies developed by Prediction Dynamics. The software builds stable models that can be used to predict financial market movements and point to trading recommendations. The multifactor models can be built with any number of relevant input factors enabling traders and quantitative researchers to rapidly detect and exploit opportunities that may have been too subtle to identify in the past.
Reuters designed DataScope for front-, middle- and back-office operations. An historical batch feed service, it currently features end-of-day prices and corporate actions from over 140 exchanges worldwide, spot rates on 175 currencies, cross and forward rates, an extensive array of global cross reference information for access across the enterprise and historical time-series data from 1976. Multiple types of securities are covered, from equities, indices, warrants and US, Asian and European mutual funds, to money market funds, money derivatives, equity options, futures and options-on-futures.
Drawing on this extensive information source, Crucible can be used to build models that support trading strategies across a wide variety of financial markets and asset classes.