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Optimizing Financial Sentiments

Prof. Gautam Mitra, CEO, OptiRisk outlines the working of his financial solutions and the model followed in the current situation.

OptiRisk specializes in optimization and risk analytics and is renowned for its R&D of models and software systems in these domains. OptiRisk partners Thomson Reuters and RavenPack in the domain of Sentiment Analysis. No wonder, therefore when Prof. Gautam Mitra, CEO, OptiRisk asserts that his team is asked to do research about the financial markets, about the data that drives the financial market and the competition models which are created using this data. “Not only do we believe in investing in talent and hiring highly talented people, we also try to effectively harness the creativity in a team environment,” he adds.

Dissecting the Solution Platter

The entire dynamics of the financial market revolves around its movement up and down. And therefore for any financial analyst predicting this movement up and down is one of the key challenges. That used to be Quant models earlier, but now OptiRisk has marked this using AI and Machine Learning. Sentiment Enhanced Signals (SES) is a daily trading signals product that has been developed with this domain knowledge to consolidate market data and news (meta) data, connecting sentiment analysis to financial models.

The other domain of specialization of OptiRisk is Stochastic Optimization where the company is a certified IBM partner (Optimization Modelling) in the UK and in India. Mitra outlines OptiRisk’s unique way of allocating asset different from the traditional way using a marketing model or asset allocation model based on a stochastic model called SSD which controls the tail risk. In the domain of optimization, OptiRisk has developed a family of Algebraic Modelling Language (AML) tools which are specifically designed for modelling and solving a wide range of stochastic programming and robust optimization problems. And finally OptiRisk manages FixMix, which according to Mita, is an interesting concept because it is borrowed from the area of gambling. That’s the sort of model that we follow.

Geographical Outreach

OptiRisk has clients in different parts of the world. Not just in UK and Europe, the client base also spans across China, India, Israel, Russia and the US. “We just made arrangements with one of the leading Chinese companies in Sentiment Analysis providing alternative data. We also have partnership with a company in China because Xingiang and Hongkong corridor is already big and going to be as big as the Western world,” informs Prof Mitra.

What, according to Mitra, drives OptiRisk’s spread is the desire to get close to the client requirements and conduct research for them on what they want. At the same time OptiRisk tries to have a generic approach while bringing the solution knowledge together. This approach is mainly targeted to bag clients in Europe and the UK. “Essentially our agenda is to do more market facing research and therefore get in compelling situation,” explains Mitra.

OptiRisk is now supplying daily trading strategies actively in three global venues. The virtual execution of strategies is taking place through Interactive Brokers (IB) account. The daily trading portfolios are for S&P 500 (US) and for Hang Seng (Hong Kong). In India the actual execution of strategies is taking place through SMC Capital who are primarily involved in Trading and Quantitative Investment Management. In the US OptiRisk provides live trading signals to Alfalab who are trading through Exante Brokers.

Securing Working Approach

The current pandemic crisis has led OptiRisk to further embrace a digital mode of working. “We have always been a WFH company, but right now we have clearly gone into top gear. We see that our employees are global, as they are in China, Kazakhstan, Milan, India, London and in Brazil and that helps,” assert Mitra. OptiRisk has always worked online using collaboration tools and this has now been thrown a lot more into frontline. The employees across the globe are now using online Go2Meeting, Go2webinar, Skype, Zoom or Microsoft Teams. “Depending on who we are interacting with we simply use richer platform collaboration,” adds Mitra.

With OptiRisk involved in handling sensitive financial data, the company has to make sure with the staff that the security is looked into very seriously. Firstly, all the staff go through a very detailed process of interviewing and subsequently they sign an NDA. The next level is of trust, admits Prof Mitra. “We trust them and indeed we have people who have worked for 6-7 years with us and then moved on. Also we insist on reliable journal publications. If it is published then, there is no question of information leak. As a result of that we get a copyright and patenting protection. We have got couple of patents. We are always working in teams, staying one step ahead,” he concludes.



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