Hedge Funds and Trading Desks to Benefit From Crucible Financial Prediction Infrastructure.Business Editors/High-Tech Writers GENEVA, Switzerland--(BUSINESS WIRE)--Feb. 26, 2002 Prediction Dynamics Unveils Groundbreaking Modeling Platform for Traders, Researchers and Risk Managers Prediction Dynamics, the systematic trading and risk management software company, launched its Crucible crucible, vessel in which a substance is heated to a high temperature, as for fusing or calcining. The necessary properties of a crucible are that it maintain its mechanical strength and rigidity at high temperatures and that it not react in an undesirable way with (TM) 1.0 financial time-series modeling platform at the Seventh European Conference on Hedge Fund hedge fund, in finance, a highly speculative, largely unregulated investment device. Originating in the 1950s, the funds "hedge" by offsetting "short" positions (borrowing a security and then selling it at a higher price before repaying the lender) against "long" Investments in Geneva, Switzerland today. Crucible is a flexible and scalable modeling system that enables the quantitative researcher to build, analyze and maintain a huge number of accurate, predictive financial models. "Prediction is at the heart of finance. Every time a trader makes a trade, an analyst makes a recommendation or a risk manager measures risk to cash flows or returns, the action is based on some projection of future market behavior," said Dr John Carney car·ney n. Informal Variant of carny. , Chief Technology Officer at Prediction Dynamics. "With Crucible, Prediction Dynamics provides a revolutionary new approach to financial time-series modeling, enabling users to build models that consistently generate stable and accurate predictive signals, even during periods of market stress." Crucible is aimed at high-end users, including hedge funds and proprietary trading Proprietary Trading When a firm trades for direct gain instead of commission dollars. Essentially, the firm has decided to profit from the market rather than commissions from processing trades. desks in investment banks The following is a list of investment banks Financial conglomerates Large financial-services conglomerates combine commercial banking and investment banking, and sometimes insurance. . The financial prediction infrastructure has applications in systematic trading, active risk management and quantitative research Quantitative research Use of advanced econometric and mathematical valuation models to identify the firms with the best possible prospectives. Antithesis of qualitative research. . The system can be used to build and maintain a very large number of predictive models across a wide variety of financial markets and asset classes. Crucible is underpinned by a large body of mathematical and computational research. The core engines for building and analyzing nonparametric multifactor models - the FactorEngine and the ModelEngine - are based on patent-pending technologies developed by Prediction Dynamics. The FactorEngine enables financial practitioners to analyze and identify the optimal factor sets that drive a market. The ModelEngine enables users to create powerful and stable nonparametric predictive models based on the factors defined by the FactorEngine. The multifactor models can be built with any number of relevant input factors. Crucible is the first software offering to get around the limitations associated with traditional parametric (bell curve or normal distribution) financial models, which assume extreme fluctuations in financial markets are rare. By providing support for extreme market characteristics such as "fat tails", the database of predictions generated by Crucible models can significantly enhance the performance of in-house (or third party) risk management, decision support and systematic trading systems The introduction to this article provides insufficient context for those unfamiliar with the subject matter. Please help [ improve the introduction] to meet Wikipedia's layout standards. You can discuss the issue on the talk page. . With Crucible, Prediction Dynamics has also achieved a high level of model stability. At the same time, the new product provides for greater transparency and understanding of the underlying models. Prediction Dynamics' prediction infrastructure includes a number of performance-enhancing tools such as the Data Transform Builder, Back Testing back testing Using historical data to determine the relationship of specific variables. For example, a researcher might use historical data to determine if changes in the money supply have influenced changes in stock prices. , Scenario Testing Scenario testing is a software testing activity that uses scenario tests, or simply scenarios, which are based on a hypothetical story to help a person think through a complex problem or system. and Factor Weighting utilities. The Data Transform Builder enables users to define and apply transforms to factor data prior to processing; with this tool users can also define unusual or proprietary prediction problems. Back Testing is used to evaluate the performance of Crucible models based on historical data, while the Scenario Testing utility allows users to test "what if?" scenarios using the models. The Factor Weighting utility reports on the weighting each factor has in a particular model, aiding the user's understanding of the internal dynamics of the nonparametric models. Crucible is a flexible, open system. The software is platform independent and three-tier client-server. Its underlying architecture is designed to ensure that it is extensible and can be easily integrated with third party and proprietary systems and data sources. The Crucible graphical user interface graphical user interface (GUI) Computer display format that allows the user to select commands, call up files, start programs, and do other routine tasks by using a mouse to point to pictorial symbols (icons) or lists of menu choices on the screen as opposed to having to allows the user to build, maintain and analyze the multifactor models efficiently and with ease. A white paper entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: "Nonparametric, multifactor financial time-series modeling," can be downloaded from the Prediction Dynamics web site at www.PredictionDynamics.com. About Prediction Dynamics Prediction Dynamics was founded in June 2000 to develop a revolutionary new quantitative approach to financial asset return and volatility prediction. Crucible, the company's core technology, is a powerful modeling platform that can be used to build and maintain a huge number of predictive financial asset return and volatility models. It has important applications in systematic trading, risk management and decision support. It is aimed at high-end users, including hedge funds engaged in systematic trading, risk managers who take an active view in managing risk and research groups engaged in developing and refining refining, any of various processes for separating impurities from crude or semifinished materials. It includes the finer processes of metallurgy, the fractional distillation of petroleum into its commercial products, and the purifying of cane, beet, and maple sugar quantitative trading strategies In finance, a trading strategy (see also trading system) is a predefined set of rules to apply. Usually, this refers to a means used to replicate an option in order to give it an arbitrage free value in the sense that the cost of buying some financial assets to give the same . Crucible, FactorEngine and ModelEngine are all trademarks of Prediction Dynamics. |
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