Our investment philosophy is based on the belief that financial markets are complex, dynamic and exhibit self-reinforcing behaviour which manifests through feedback loops. These feedback loops lead to market complacency and market stress, as evident in tail risk events such as the Asian Financial Crisis, the Dotcom Bubble and the Global Financial Crisis.
Systems that depict feedback loop characteristics are typically chaotic in nature. Chaotic systems are challenging to understand through conventional statistical techniques, often mistakenly characterised as random events.
Alpha Vista believes that chaotic systems within financial markets can be understood if underlying patterns of behaviour – which are inherent in the data – can be discovered. Once discovered, pattern recognition enables the definition of regime states associated with market biases.
The combination of data science, AI-based analytics and distributed computation technology is the means by which complex chaotic systems can be analysed in real-time to identify opportunities for alpha generation and risk mitigation.