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Proof of Concept

Where our solution meets the real-world

Introduction

The overview

We have put our new paradigm of relationship-driven investing into test by using a miniature of the 360° view as data and applied our in-house Semantic AI algorithms to extract smart metrics. We then used well-known portfolio optimization algorithm to make a comparative study. The experiment would build portfolios with and without our smart metrics providing us two sets of return rates to comapre.

The data

The miniature 360° view contains limited but vital data on 140 companies from the S&P 500 index. Also, the relationships that were covered in the miniature data is limited as it does not contain all the relationships between companies and other companies/entities. As mentioned before we also used traditional data to perform a comparative study. This data contains historical returns and asset correlation.

The results

The results show that the relationship-driven portfolio performs significantly better than the traditional approach(at least 20% in an uncompounded manner). What's more is that the boost in performance is constant meaning that the performance of the relationship-driven portfolio never falls below the traditinal one. Looking at the constructed portfolios we could also observe clearly the logic with which our new paradigm decided for certain assets to be in the portfolio. All in all, our experiment which was conducted several times with different time frames in mind shows the benefits of the relationship-driven investment right away.

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Asta

Founder & CEO

April 20, 2020