Arialytics IDEAS™ is a fundamental-data based artificial intelligence (AI) research datafeed that aggregates millions of price, fundamental, and macro-economic datastreams into continuously updated expected return and alpha forecasts.
Arialytics IDEAS™ is a fundamental-data based artificial intelligence (AI) research datafeed that aggregates millions of price, fundamental, and macro-economic datastreams into continuously updated expected return and alpha forecasts. Investors for whom research quality, depth of insight, and comprehensiveness are essential rely on Arialytics IDEAS™ to understand forward-looking return and alpha prospects. Arialytics IDEAS™ provides both real-time analytic value and historical depth to investment decision makers and analysts who require deep, unbiased industry and company insight.
Arialytics IDEAS™ provides out of sample forecasts going back to 1999 for 5,000+ U.S. listed and traded equities and ADRs as well another 5,000+ delisted equities. Data is also included on 250+ industries.
The Coverage and Feed Structure
Arialytics IDEAS™ is offered as two separate datafeeds. Arialytics IDEAS™ provides rank forecasted expected returns for each equity security and each industry. Arialytics IDEAS™ Alpha provides rank forecasted expected five-factor alphas for each security and industry.
Both datafeeds provide separate forecasts for each of eight holding periods including 1,3,6 months and 1,2,3,4, and 5 years so that analysts can access the forecast that is most accurate for a particular investment use case. All forecasts are rank normalized between zero and one with more positive numbers indicating higher expected returns or alphas.
In the Arialytics IDEAS™ nomenclature, a return forecast is referred to as an Investment Return Rank (IRR) and an alpha forecast is referred to as Investment Alpha Rank (or IA5R where "5" indicates 5-factor Alpha).
The DataFeed also includes Expected Contribution factors that quantify how important different types of fundamental and technical variables are to each security or each industry’s forecast so that analysts can quickly understand which fundamental concepts are positively (or negatively) contributing to a forecasted return or alpha. There are two meta-types of Expected Contribution factors: Fundamentals and Technicals. The chart below shows the factors within each type..
Key differentiators of the IDEAS™ DataFeeds are the sourcing and construction of the data. Arialytics has been utilizing AI to discover patterns amid complex and changing industry dynamics since 2010. To construct the forecasts, Arialytics aggregates millions of price and fundamental data points across virtually every firm listed on US exchanges. Data is drawn from exchanges, company fundamentals, governmental and industry statistical bureaus. No personal data is used. Arialytics’ data sources are verified point-in-time and the dataset employs a single point-in-time estimation methodology across all time periods.
Another valuable part of the Arialytics DataFeed is the extensive coverage. The feed offers forecasts of over 250 industries, encapsulating every sector, sub-sector, industry and sub-industry in the United States. To accompany this industry data, Arialytics IDEAS™ delivers research across 5,000+ traded equities and ADRs and another 5,000+ delisted equities.
Example Use Case
Arialytics provides a unique, investment decision-making resource that helps financial professionals understand future return and alpha prospects, test hypotheses, and discover new investment ideas. Arialytics has extensively documented performance of the IDEAS™ DataFeeds indicating, over different holding periods, an ability to accurately forecast relative returns and alphas.
With the DataFeeds’ performance forecasting ability, and back-testable data starting from December of 1999, a variety of different use-cases arise. For example, Hedge Funds and Investment Managers can leverage Arialytics IDEAS™ to discover profitable long-short, beta neutral, and long-only investment stories that are likely to play out over the next few months to the next few years. For Private Equity Investors, IRRs at the industry level allow managers to quickly discover and focus on industries with the most return potential and avoid those with the least.
For the Corporate Analyst, or Investment Banker, Arialytics IDEAS™ helps answer important questions, and bring new ideas to the forefront, pertaining to future M&A activity and the relative attractiveness of different industries. All of this is achievable through Arialytics AI-driven methodology and forecasts.