“It gives us access to a new market, and it gives us new visibility,” said Claire Wachter, development manager for financial products at AP.
With the new RavenPack technology, AP hopes to lure more customers from hedge funds and other investment groups. The depth of AP's worldwide news coverage will give its product an edge, said Armando Gonzalez, president-CEO at RavenPack. “In equity markets, they break stories, provide news flashes and provide a comprehensive analysis,” he said. “And they are trustworthy, which makes our analytics more valuable.”
The equity product will use AP as the main source of real-time news analysis, providing insights into about 28,000 public companies. RavenPack is already active in the financial services market, where its products include RavenPack News Analytics-Dow Jones Edition.
For AP, the RavenPack system will develop metrics based on the appearance of public companies within AP articles, Gonzalez said. Those metrics can then be used in quantitative models and trading programs to create transactions or provide trader alerts.
Companies will be rated first on their appearance within AP articles, then weighted based on their relevance to the overall story. News events will be segmented into more than 300 actionable alert types. Ratings will indicate the novelty of a news item, as well as the level of attention that item has received in the media.
A final layer of analysis will provide a numerical sentiment score based on the tone or language in the story. The resulting metrics will help traders diversify traditional investment models and develop trading strategies.
A product targeting a second market will be launched next year, Wachter said. The move comes both as demand for news and the analysis of online sentiment rises on trading floors, and also as media companies look for new ways to monetize their assets.
RavenPack has seen its business quadruple in the past year, an indicator of the hunger for digestible insights; the market offers an extension for AP content without requiring the company to develop new processes.
“There's nothing we're changing from our side,” Wachter said. “It's just the normal course of doing business—and hopefully breaking more news.”