ALPHA refers to the value-added from investment insights.
SYGNAL now provides a platform to directly exchange Alpha.
We call it Alpha As-A-Service.
An example of SYGNAL's leverage potential
Distributing FX-Alpha to banking clients
Avaloq is a leading provider of core IT systems for banks. Over 150 banks have more than USD 4 trillion in assets on Avaloq.
A PERFECT MATCH – SYGNAL & AVALOQ
Sanostro developed an adaptor which can directly feed FX-alpha from SYGNAL into the Avaloq core banking system. Combined with Avaloq’s portfolio management software, this enables banks to design and implement automated FX management services in scale and within the bank’s existing IT environment.
For Banks, this innovative client offering leads to substantial new fee income and a meaningful impact on the return from assets under management (RoA).
For SYGNAL this means leverage and access to a new client base.
Detailed Use cases
SYGNAL pioneers ALPHA-AS-A-SERVICE and enables new business models for investors, asset managers, fintech and researchers.
USE CASE - MANAGING CURRENCY RISK
Challenge: “How can we professionally manage the currency risk from international portfolios?”
Solution: Systematic currency management based on FX-Alpha from SYGNAL. The actionable trading signals from SYGNAL are easy to implement into ANY existing currency framework.
Benefit: A cost effective way to align your FX positions to FX market dynamics. Your induced currency exposure from international assets switches from an unloved risk to an actively managed source of alpha.
USE CASE - DYNAMIC EXPOSURE MANAGEMENT
Challenge: “I don't see better return sources than equity, but I am nevertheless worried. We are in one of the longest bull markets ever!”
Solution: Dynamically adjust your market exposure based on quantitative trading signals. SYGNAL offers signals on many assets and from multiple sources. Signals on the same asset can be easily combined and implemented into your strategy by directly adjusting your portfolio or through overlay management.
Benefit: Good risk management requires an ongoing assessment of market stability and a constant readiness to act. Employing a scalable systematic process for this task is cost-effective and avoids behavioural pitfalls. You run with the bulls and stay prepared for the bears.
USE CASE - TACTICAL ASSET ALLOCATION
Challenge: "How can we make better use of our risk budgets within our asset allocation?"
Solution: Use dynamic asset allocation signals from SYGNAL to tactically reallocate your risk budget within and between asset classes based on medium-term macro trends, valuations, and market imbalances.
Benefit: An operationally simple and transparent systematic process to tactically adjust your strategic allocations to the current market dynamics. You benefit from the changing market dynamics by diversifying across asset classes and across time.
USE CASE - HEDGE FUNDS
Good research is an expensive prerequisite for unique investment insights. Systematic hedge funds spend money and time to develop state of the art quantitative investment models.
Challenge: Hedge funds are dependent on the management fee earned on their flag ship product(s) to fund their business. This income stream is volatile and relies heavily on the recent track record of the flag ship fund, which introduces substantial business risk.
Solution: SYGNAL offers hedge funds an effective way to leverage their existing research efforts through a new distribution channel. SYGNAL also allows hedge funds to build blockchain certified track records on individual model level.
Benefit: Diversification of income sources and reduced dependency on one track record lead to higher profitability and less business risk.
USE CASE - INDEPENDENT RESEARCHERS
Independent researchers might have different data (e.g. from social networks, shipping data etc.) or have their origin in a different field than investing. Being different is good as it can lead to unique investment insights.
Challenge: Many truly different investment researchers and their valuable intelligence are not accessible. For them the current business model of monetizing research insights by creating and selling their own investment products limits their potential.
Solution: SYGNAL provides a simple and ccost-effective way to monetize truly different investment insights without having to build the entire investment value chain internally.
Benefit: Lower entry barriers for researchers with unique insights whose expertise previously was not accessible.
USE CASE - PRIVATE BANKS & ASSET MANAGERS
Private clients have become more knowledgeable and are expecting a broader range of investment expertise and services from their banks and independent asset managers.
Challenge: Especially mid size banks and independent asset managers might not have the resources to build this breadth of expertise internally, leaving them vulnerable to larger competitors.
Solution: SYGNAL offers a simple way to complement the inhouse research efforts and close existing research gaps.
Benefit: Possibility to concentrate in-house research on selected asset classes and topics, while still offering the breadth of research coverage of larger competitors.
USE CASE - INVESTMENT CONSULTANTS
Investment consultants have been helping their clients selecting suitable investment products. Going forward, consultants can access the SYGNAL platform to select suitable investment intelligence and build customized solutions for their clients.
Challenge: Asset Managers offer best in class investment solutions, undermining consultants’ main value proposition. On the other had, consultants have refrained from offering in-house investment products in order to avoid conflicts of interest and be able to offer independent advice.
Solution: Consultants can use the SYGNAL platform and its analysis tools to select investment signals and combine them into tailored investment solutions for their clients.
Benefit: Offer in-house investment solutions while remaining independent and true to the best-in-class idea. BE able to compete with asset managers at arm’s length for the investment solution market.
USE CASE - INSTITUTIONAL ALPHA FOR FINTECH
Robo-advisors are challenging the industry by offering inexpensive tailored investment solutions to retail clients.
Challenge: The best investment insights can today only be accessed by investing in traditional funds. The alpha content of many FinTech solutions is relatively low.
Solution: Systematic trading signals available on the SYGNAL ecosystem are scalable and operationally simple to integrate into any FinTech solution. The SYGNAL ecosystem bridges the gap between institutional alpha and FinTech tailoring.
Benefit: The result are high-alpha tailored investment solutions for retail investors. This is the next step in the evolution for RoboAdvisors and other FinTech channels.
USE CASE - CRYPTOEXCHANGES
Cryptoexchanges offer access to an exciting and very volatile alternative asset class. But the fiat value of a cryptocurrency can change dramatically within a short period of time.
Challenge: The exchange rate of a cryptocurrency is mainly driven by market dynamics. A systematic analysis of market patterns via quantitative models can help guide crypto investments.
Solution: Systematic trading signals on crypto sourced via the SYGNAL platform and made available to the clients of a cryptoexchange.
Benefit: Better insights into the dynamics of a cryptocurrency will capture most of the upside will mitigating most of the downside risks.