Alternative data:

Exploring the unique value of global financial quantification

Mr. Eric Yu, the CEO of Global Tone Communication Technology Co., Ltd. (GTCOM), delivered a keynote speech at the forum of "Alternative Data: The New Oil," which the company held on January 9, 2019. He shared the innovative application of alternative data in the financial field and presented GTCOM’s leadership in the field of financial big data. "Alternative data will bring unique excess value to global financial quantification," he said.

GTCOM CEO Eric Yu

Given the development of AI big data technology, alternative data has been more and more valued and applied by global financial quantification giants. More than half of today's financial professionals believe alternative data is more important than traditional data. As opposed to traditional financial data, alternative data--characterized by high real-time performance, large volume and "primitivity"--can give investors a wider range of trading ideas as well as more timely trading signals. Thus it can provide asset allocation, trading strategy and portfolio solutions to users on the capital side.

Alternative data is new oil

Mr. Yu started the meeting with the statement, "Alternative data will open a new chapter in 2019." whereupon he introduced the concept of alternative data and pointed out the latest insight in the field of financial big data: "Alternative data is the new oil."

Additionally, he described the use of big data and artificial intelligence to drive the development of financial quantification, tap the potential of alternative data and maximize its value. He explained that GTCOM, with its formidable technologies in big data and artificial intelligence, conducted precise analysis and deep mining of the world's vast amounts of open and unstructured data, builds quantitative models and uses quantitative data to calculate market information, investor confidence and other alternative data, all of which gives investors keen analysis of investment opportunities and the ability to develop the best investment strategies from a global perspective.

Mr. Yu introduced the technological strength and practical results of GTCOM in exploring the value of the world's vast amounts of financial alternative data from the perspectives of market emotion, market sentiment, global panic index and other unique algorithms and data in combination with data assets, knowledge-graph building and other aspects. Among them, GTCOM's SSE Composite Index quantitative model has, for more than 12 consecutive weeks, demonstrated accuracy exceeding 85% as a predictor of trends in trading and can realize the real-time data calculation of long-cycle, short-cycle and daily stock index values. Additionally, taking the Hong Kong Stock Index 100 and Brent crude oil as examples, Mr. Yu described the increasingly important role of alternative data in financial quantification decision-making.

The conference site

Quantifying market sentiment and predicting future market

As he discussed the impact of market sentiment on financial market conditions, Mr. Yu said that triggering market sentiment will facilitate more efficient market decision-making, fully elucidate and measure market sentiment, and accurately predict the market impact in real time, all of which is of great significance in the process of financial quantification. By using NLP financial market-sentiment algorithms, GTCOM analyzes multidimensional reference factors such as policy factors, sentiment factors, risk control factors and growth factors, and applies them to different fields such as investment trade, commodity trade and industry regulation to give investors market-insight analysis from different perspectives as well as the ability to spot new opportunities for market investment.

Mr. Yu also gave a detailed explanation for the specific sentiment indicators that can reflect and influence market changes. The AR of market trading is analyzed on the basis of factor indicators such as market fluctuation rate, stock price and stock trading volume. Thus, the sentiment level, heat, degree of change and speed are analyzed. The quantitative method is in turn used to estimate the change of risk assets, investment attitudes, investment decisions and risk tolerance of global investors, while income expectations, interest rate forecasts and other opinions are analyzed to reflect the degree of willingness to buy and sell in the market. The risk-preference index is established through the use of factor indicators such as foreign exchange earnings and foreign-exchange risk-correlation coefficients, reflecting market investors' attitudes toward risks. Market insights and analysis from different perspectives are provided to help financial practitioners make more appropriate investment decisions and improve their returns.

Participating guests

Mining the value of alternative data

Changing the breadth and depth of financial services

As the world's leading enterprise of big data and artificial intelligence, GTCOM uses advanced natural language processing and semantic computing technologies to mine and analyze vast amounts of data from around the world. As Mr. Yu emphasized, GTCOM has deeply explored the field of big data for the past five years, thereby accumulating a wealth of Internet open data, scientific and technological data, and financial data. These data resources have created huge market sentiments and facilitated the innovative application of alternative data in the field of financial quantification.

Mr. Yu carefully but enthusiastically described the application of GTCOM's powerful capability of real-time multidimensional data analysis in the field of machine-readable news. Through powerful NLP algorithms, GTCOM can deconstruct classified global news and carry out real-time translation. It then analyzes the news and social media data, provides the backtracking service of historical news archives and the structured news and news-analysis service with ultra-low latency to conduct the multidimensional qualitative and quantitative analysis of news data. Given the correlations among data drawn from multiple dimensions, deepening the value of data is crucial to the market development of enterprises. Mr. Yu said that GTCOM strives to become the new Bloomberg and new Reuters in the era of financial technology.

"The power of computers is beyond human imagination," said Mr. Yu in conclusion. He expressed his vision for the application of alternative data, hoping to bring this vast capability to China's financial market global partners. Accordingly, GTCOM will focus on financial big data and lead the innovative development of financial quantification.