Dow Jones Unveils News Analytics Suite
Traders Magazine Online News, February 17, 2012
Dow Jones has introduced a new software suite that provides traders with analysis of the machine-readable news feed the company offers to traders. The suite offers analysis not only from the media giant’s own analytics service but from three new technology partners as well.
Dubbed News Analytics, the new suite combines information from Dow Jones’ many news outlets—including The Wall Street Journal, Barron’s and wire services—with analysis from tech firms Alexandria, Digital Trowel and SemLab. It also provides analysis from RavenPack, a firm that has partnered with Dow Jones for several years, and the company’s own analysis service.
Rob Passarella
Rob Passarella, vice president of Dow Jones Financial Markets, said quantitative traders have always plugged numerical data into their strategies, but now many are looking to incorporate textual content into their computerized trading programs as well.
Dow Jones launched its first machine-readable news feed in 2007, with a product called the Elementized News Feed. In 2010, it launched its Lexicon product, which converts news content into actionable data for trading models.
Lexicon, as well as Alexandria, Digital Trowel, SemLab and RavenPack, convert text from news sources into numbers measuring positive or negative sentiment on a stock. Those sentiment scores can then be fed directly into electronic trading programs.
Though Dow Jones already had its own news sentiment analysis system, the company decided to partner with other firms so it would not have to restrict its clients to using only one format for interpreting its news.
“Over the last couple of years, we’ve had customers come to us and really initiate a conversation, saying, ‘Listen, I want to use your content, and I have this provider I want to work with,’” Passarella said. “What we decided to do is pick a couple of partners who had different abilities.”
RavenPack specializes in quickly rating news with sentiment scores in under a second. The firm tracks nearly 30,000 companies and boasts the ability to interpret and deliver data on them with minimal latencies, according to Armando Gonzalez, the firm’s president and chief executive officer.
SemLab, on the other hand, offers traders more of a toolkit than just a single sentiment number. The firm rates news sentiment from -5 to +5, then details why the news event received that score. SemLab CEO Bram Stalknecht said the system also allows users to change how events get rated.
Though most analytic systems are based on the words used in articles or use simple rules to determine sentiment, Alexandria uses a statistical pattern-matching methodology, according to the company’s CEO, Eugene Shirley. He said that helps the system to adapt to different languages and different asset classes.
Officials from Israel-based Digital Trowel did not return requests for comment, but according to Dow Jones’ Passarella the firm provides the ability to drill down into information at the paragraph level.
For more information on related topics, visit the following channels:
