Exploiting stock market anomalies and identifying undervalued and overvalued stocks

– using our quant-based augmentative strategy for portfolio composition

Emotional Finance is an emerging field which combines finance, psychology and statistics to provide unique insights into market and investor behaviour by understanding the powerful unconscious processes and wish-fulfilling fantasies that play a key role in driving all financial decisions.

This emotional finance understanding of investor unconscious needs and fantasies shows how it is possible to explain the existence of systematic market mispricing of stocks with particular emotion-generating characteristics including their tendency to attract investors with gambling inclinations, particularly in the bad news domain.

Many years of research at Warwick Business School, Edinburgh University and elsewhere have resulted in algorithms and statistical models which are able to identify many such stock market “anomalies” which can be systematically exploited to identify practical trading opportunities.

ALA demonstrates the effectiveness of Emotional Finance algorithms and approaches to identify stocks with particular ”anomalous”  characteristics that lead them to be mispriced often for quite a period of time.

We consolidate relevant news and other data sources, and apply and tune our algorithms and predictive models to identify tradeable “target” stocks using historical data.  After backtesting, the models are applied for forwards predictive capability in live trials.

We are delighted to offer a free-of-charge ‘Proof of Concept’ (POC) for the ALA OneLogic™ Financial Analytics quant-based augmentative strategy for portfolio composition, tailored to your own requirements.  The design of our POC allows you to invest as much or as little time as you have available.

The POC has been designed to assist portfolio selection and aid the decision-making process.  Not only will it help mitigate against downside risk, it will help to enhance upside potential and will increase returns by between 5-8% after trading costs.

If your firm would like to undertake a free 3-month proof of concept trial, please get in touch: contact@advancedlogicanalytics.com