Xiang Yu is Business Development Techno Executive at OptiRisk Systems. She has a PhD in Mathematics from Brunel University. Her research interests are in sentiment analysis, predictive analytics and market microstructure and their applications in financial analytics. In OptiRisk Systems, she conducts client facing applied research; she is also in charge of all aspects of acquiring market data and news metadata. Xiang and Prof. Mitra are co-editors of the “Handbook of Sentiment Analysis in Finance”.
Exploiting Market Sentiment to Create Daily Trading Signals
We have created an innovative and dynamic trading strategy for equities, with a particular focus on controlling downside risk. The mathematical concept behind the approach is called stochastic dominance, where investment decisions are based on distributions rather than moments. A major contribution of news sentiment is in the prediction of future distributions. Regression analysis on news sentiment and regime switching models are employed to digest market moods and account for changing market situations.