The foundation of OpenMetrics services are two core technologies: Stability Signals and Geometric Shape Factors, which open a large array of applications within the financial industry. Both core technologies have been thoroughly tested over many years at ETH Zurich and in practical industry applications.
Due to the stochastic nature of financial markets, trying to predict outcomes or recognizing sustainable patterns is deemed to fail. We focus on precise and timely measurement of current market status and act on that – nothing else.
Financial markets are generally the fastest and true source of information about themselves. We only use market returns as inputs for our models.
Simulations are the only way to design and test financial models properly. However, the crucial point is to avoid the main common pitfalls and biases. This is one of our core competences – realistic simulations.
Nowcasts instead of Forecasts
Stability signals are based upon a groundbreaking methodology developed by OpenMetrics, which is based upon Bayesian Change Point (BCP) analysis.
At its core, we measure the probability of entering a new market regime with changing dynamics. Thus providing a self calibrating logic for measuring financial market stability.
OpenMetrics stability Signals can be directly used to manage exposure across several markets/asset classes.
The main advantage - in contrast to other methods - are the accuracy and speed of adaptation, which serves to protect efficiently against unwanted market downturns.
GEOMETRIC SHAPE FACTORS
Geometric shape factors are an innovative approach for managing portfolios by including the perspective on the whole investment universe (feasible set).
By using the geometric information of the feasible set, the risk/return profile of the portfolio can be significantly improved.