Xiang Yu is Business Development Techno Executive at OptiRisk Systems. She has a PhD in Mathematics from Brunel University and Bachelors from Manchester University. Her research interests are in sentiment analysis, predictive analytics and market microstructure and their applications in financial analytics. Xiang and Prof. Mitra are co-editors of the “Handbook of Sentiment Analysis in Finance (published 2016)”.
Daily Trade Signals using Sentiment Analysis and Stochastic Dominance for Downside Risk Control
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.