Understandable Artificial Intelligence
Overview
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©2018 Economic Data Sciences
Risk analysis is one of the core value proposition of EDS software
- We provide rigorous analysis of factor exposures and geographical risk assessment
- Using EDS preference based approach, clients can focus on reducing certain risks or increasing exposure to others
Expected Alpha vs Active Risk
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©2018 Economic Data Sciences
We use a very high bar when estimating forward-looking alpha expectations. These forecasts represent excess return over a benchmark and over factor driven return. Why do we do this? In essence, factor driven return can be harvested elsewhere, hence we use this strict definition
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Funds names shorthand is on the following slide
*Data from EDS, Oppenheimer, & Bloomberg, courtesy of London Business School
Fund Names Shorthand
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©2018 Economic Data Sciences
- LCV - U.S. Large Cap Equity Value
- LCG - U.S. Large Cap Equity Growth
- MCV - U.S. Mid Cap Equity Value
- MCG - U.S. Mid Cap Equity Growth
- Small Cap - U.S. Small Cap Equity
- Global - Global Equities
- International DM - Developed Markets Equities
- International EM - Emerging Markets Equities
Risks Breakdown
![](https://s3.amazonaws.com/media-p.slid.es/uploads/767827/images/4209605/EDSbest.png)
©2018 Economic Data Sciences
![](https://s3.amazonaws.com/media-p.slid.es/uploads/767827/images/5064982/TypeRiskBreakdownOpp3v2.png)
Risks by Type
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©2018 Economic Data Sciences
![](https://s3.amazonaws.com/media-p.slid.es/uploads/767827/images/4887828/TypeRiskBreakdownGeneric.png)
Risks Breakdown - Type
![](https://s3.amazonaws.com/media-p.slid.es/uploads/767827/images/4209605/EDSbest.png)
©2018 Economic Data Sciences
![](https://s3.amazonaws.com/media-p.slid.es/uploads/767827/images/5064991/TypeRiskDecompOpp3.png)
Risks Breakdown - Geography
![](https://s3.amazonaws.com/media-p.slid.es/uploads/767827/images/4887824/RegionRiskBreakdown.png)
Disclaimers
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©2018 Economic Data Sciences
Get In Touch
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©2018 Economic Data Sciences
info@EconomicDataSciences.com
info@EconomicDataSciences.com