Capital Markets See Value in Visualization Technology07.24.2012
Large and complex sets of data needs to be organized in a transparent way that humans are already very good at understanding. That’s fueling demand for data visualization tools.
“Our brains are excellent at navigating a visual environment and picking up on subtle visual cues,” said Jason Javarone, vice-president of solutions at software provider Aqumin.
Successful risk management requires ad hoc discovery of potential dangers while there is still time to act. Reducing systemic risk requires “finding and acting on risk accumulations that you might not have even known to look for, or program a computer to look for, until after you see it”, said Javarone.
“Spreadsheets and 2D charts and non-interactive 3D charts don’t provide the necessary context and interpretive environment that is required for such ad hoc discovery.”
Numerous capital market firms have recently suffered losses due to missing risk accumulation that, after the fact, seemed like it should have been obvious. The same is true for traders missing market opportunities, except they suffer forgone gain rather than the easier to identify loss.
Aqumin’s AlphaVision provides an interpretive environment that allows users to make ad hoc discovery in their data—often finding insight that fully automated systems would have missed.
“The AlphaVision environment also allows users to digest vast amounts of data very quickly, on one screen, so all can be seen in context,” said Javarone. “This is evident in screens we have built for risk managers, displaying critical risk contribution of thousands of positions, all at once and on one screen—that is something that is impossible to do by reading a spreadsheet.”
Transaction cost analysis (TCA) systems are being redesigned to help portfolio managers craft strategies in real-time by studying trade behavior across a wide spectrum of time increments, or analyze historic data for predictive modeling.
“The TCA conversation has evolved from a check-the-box compliance tool to an alpha generation exercise,” said Ethan Levinson, president of SJ Levinson & Sons, a high-touch institutional brokerage.
The firm’s Trade Analysis Program (TAP) includes a real-time, customizable suite of analytics that enables institutional portfolio managers and traders to implement pre-trade strategies and analyze post-trade results, with granularity across a wide range of time increments and perspectives, Levinson said.
“The buy side needs to pull together information in a meaningful fashion,” said Levinson. “TAP enables them to use visualization tools to fulfill compliance obligation of best execution, maximize alpha and reduce slippage.”
Aqumin and MDX Technology (MDXT), a software company, are collaborating to leverage MDXT’s Connect market data connectivity software with Aqumin’s dynamic visual interface and interpretation tool, AlphaVision.
Through MDXT, Aqumin brings real-time feeds into an interactive 3D landscape, allowing users to quickly spot trends, outliers and opportunities across markets and asset classes for thousands of securities on one screen.
By enabling market participants to monitor more securities at once, and spot relational changes against other securities or benchmarks, AlphaVision provides access to more opportunities and a faster way to monitor market risk and take full advantage of ‘Big Data’, said Javarone at Aqumin.
“Computer algorithms are excellent at finding yesterday’s patterns and exceptions,” he said. “AlphaVision allows users to find the critical issues happening right now, before someone has thought to program a computer to look for them.”
Traders are increasingly being asked how ESG fits in execution.
Richard Turner of Insight Investment sees more automation and more transparency around cost and outcomes.
The suite enables GAM to seamlessly manage market risk exposure and liquidity and investment risk.
Asset manager anticipates an SEC decision on converting its fund to a spot bitcoin ETF by early July.
Fidelity continues to hire thousands to support cryptocurrency.