Lucena Research, Benzinga Cater To Emerging Demand For Algorithmic, Machine Learning Insights

Lucena Research, a leader in investment decision support technology, has partnered with Benzinga over newswire and analytics to seamlessly integrate news content into the Lucena Research AI QuantDesk platform.

As part of the development, Erez Katz, co-founder, and CEO of Lucena, spoke to Benzinga regarding his company’s commitment to helping investors gain access to what has been traditionally a luxury of the few with a clear goal of helping investors gain access to scientifically-backed investment decisions.

What Is Lucena?

Lucena Research is a technology provider with deep expertise in data science and machine learning specific to the financial markets. The firm’s products empower portfolio managers and researchers with easy access to information predicated on a variety of datasets for the purpose of deriving predictive insights.

“We have built an interactive toolset that enables users of various sophistication levels to construct, validate, and deploy algorithmic strategies based on multiple orthogonal datasets,” said Katz.

“Our machine-learning engine is able to sift through 100's of factors and combine the most relevant ones into high-conviction composite buy and sell signals. We have democratized some of the most sought after technology, formerly available to only a few sophisticated hedge funds, by allowing investors to discover new ideas or validate their own hypotheses in order to make better investment decisions.”

In light of a recent partnership, Lucena will incorporate Benzinga’s news content into a sentiment score after relevant news hits the wire. This, combined with Lucena's wide array of fundamental, technical, global macro and other alternative data indicators will enable investors to derive statistical price forecasts and predictive models.

“Our deep learning technology is geared to identify through NLP, natural language processing, the strength of the sentiment of a Benzinga news article towards a company,” Katz said. “We combine that sentiment with other data sets, such as social media sentiment, or analysts consensus to further confirm the article's sentiment.”

Overall, Lucena’s machine learning technology is able to efficiently analyze over 950 different variables in order to form high-conviction trading ideas.

Breadth Of Product

The firm’s flagship tool, QuantDesk, is the convergence of multiple technologies for use by portfolio managers and researchers that approach investing from either a quantitative, or pure algorithmic perspective.

“Over the past six years, since inception, we have mastered the art and science of data analysis,” the CEO said. “We are now able to efficiently take any data and validate its authenticity and efficacy for various investment objectives. This is an efficient process that converts raw data into actionable signals.”

On top of model portfolios, Lucena also delivers smart data feeds, a simplified signal data feed that can be incorporated smoothly into buy-side research for easier visualization and model building.

“Our backtest engine, allows our customers to quickly visualize factors within a dataset and assess how the underlying data can affect the outcome of certain investment objectives,” Erez added.

Additional tools in QuantDesk include portfolio construction and optimization, hedging, event signals and more. Most importantly, QuantDesk enables users to build and evaluate, through backtesting and paper trading, portfolios before risking capital.

“Our Hedge Finder, for example, enables a user to load up their long-only portfolio and identify what securities can be added to the core portfolio in order to minimize volatility, without affecting its original returns trajectory. Additionally, our event Event Analyzer allows us to evaluate how certain assets respond to meaningful market or idiosyncratic events.”

Product Evolution

According to the CEO, investors want quality data and insights.

“Lots of traders and portfolio managers are looking for ways to activate an idea that they have in mind,” he said. “Our platform can take an idea and put it into code, by which users can evaluate it algorithmically through backtests to make sure it’s meaningful.”

Moving into the future, Lucena will further cater to the emerging demand for systematic, scientifically validated portfolios that trade algorithmically.

“Algorithmic investment is where the future is. Through the technology we deploy, we will help people realize their ideas, insights, and aspirations.”

To learn more about Lucena’s proprietary, technology-driven investment innovations, click here.

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