Samurai Data Analytics: Precision Analytics for Decisive Outcomes

Samurai Data Analytics: Precision Analytics for Decisive Outcomes

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Adam Frederick, Co-founder & CEO, Samurai Data Analytics Adam Frederick, Co-founder & CEO In Japanese culture, a Samurai is a warrior of military nobility, adept in his skill with the traditional sword or katana. In a battle, the Samurai relies on his faculties and senses to fight. He observes the minutest details on the battlefield to react and respond almost instinctively to ensure decisive victory. To many, this might seem like sorcery; but it is a result of training and sheer ingenuity. Perhaps it is this dynamic nature of the Samurai that gave Samurai Data Analytics its moniker. As a financial analytics firm, their battlefield is the capital market, and their sword is intelligence. Samurai Data Analytics has honed its senses through cutting-edge machine learning (ML) and artificial intelligence (AI) techniques to glean decisive insights.

Founded in 2019, Samurai Data Analytics has become a global leader in capital markets intelligence and risk management solutions within a short period. The company’s widerange of products and services help wealth managers, hedge funds, asset managers, asset owners, allocators, risk desks, and hedging operations generate alpha, identify/quantify risk, and optimize hedging strategies. Samurai knows that one of the most challenging parts of trading and money management is protection against drawdowns. The company offers capital market participants various tools and solutions geared toward quantitative research, alpha generation, capital preservation, hedging efficiency, correlation risk analysis, black swan event detection, and more. Samurai occupies a niche in the market, with unique applications for the use of AI/ML techniques, coupled with their team’s distinctive expertise in market structure analytics and volatility research.

“ We combine our team’s unique backgrounds in an academic kind of approach. In meshing together our expertise in volatility and equity options analysis, and complimenting that with a more subjective view of the market in terms of market structure analytics and institutional pattern recognition, we’re able to add tremendous value”

In the words of Adam Frederick, Co-founder and CEO of Samurai, “While quants and hedge funds were quick to adopt AI/ML techniques several years ago, more traditional market participants were initially skeptical. We’ve seen this paradigm shift over the past 6 to 12 months, however, as there’s been a tremendous uptake in the adoption of AI/ML-based solutions from the likes of wealth management practices, pension funds, endowments, family offices, etc. They’re really starting to look at how they can leverage this technology to enhance their portfolio returns, decrease volatility, and effectively manage risk.”

Samurai’s full suite of quantamental research and AI-driven trading solutions empower fund managers, analysts, investment advisers, traders and researchers with novel insights on market structure, trader sentiment, volatility, relative strength, and more. Available in multiple latencies and delivery options, the company’s research and trading tools deliver ideation, confirmatory research, market timing, and alpha generation.

“We think of ourselves as an innovator in artificial intelligence and machine learning-driven trading solutions and risk management tools. That is in essence, who we are and what we provide,” Frederick adds.

The tools, combined with a highly scalable infrastructure, and seamless integration, make Samurai Data Analytics flexible and easily deployable in any environment.

Making a Novel Solution—The Building Blocks of Innovation

The Samurai team brings their rich experience in novel volatility research, options analysis, and capital markets intelligence to enhance the way alternate data is processed and assimilated.


We’ve seen this paradigm shift over the past 6 to 12 months, however, as there’s been a tremendous uptake in the adoption of AI/ML-based solutions from the likes of wealth management practices, pension funds, endowments, family offices, etc. They’re starting to look at how they can leverage this technology to enhance their portfolio returns, decrease volatility, and effectively manage risk

Frederick has built his forte in market structure analysis over the past two decades, previously advising C-level executives of publicly-traded companies on shareholder activism, institutional trading pattern recognition, and predictive intelligence.

Meanwhile, Rob Meyers, co-founder and Chief Information Officer at Samurai, whose past studies and research include Computer Science at Cornell University, and later, Probability Theory in the Ph. D. Program in Mathematics at the Courant Institute of Mathematical Sciences at NYU brings over 20 years’ experience working with some of the most sophisticated quantitative development teams in the industry.

“We combine our team’s unique backgrounds in an academic kind of approach,” says Co-founder and CIO, Rob Meyers. “In meshing together our expertise in volatility and equity options analysis, and complimenting that with a more subjective view of the market in terms of market structure analytics and institutional pattern recognition, we’re able to add tremendous value,” continues Meyers. Samurai then leverages AI/ML techniques to make the most of that analysis for successful strategy optimization and risk management.

Trading/risk management solutions from Samurai Data Analytics include:

The Samurai Signal™—a dynamic signal that leverages AI/ML to generate 5-day expected returns for over 3,000 US stocks daily, based upon a proprietary blend of correlation analysis, sophisticated options pricing models, institutional ownership factors, and company fundamentals. The model’s daily results are binned by these expected returns, with the overall average return of each bin achieving near-perfect predictive success.

StockVix—a stock-specific “volatility index,” is a powerful signal that measures the expected volatility that a given stock will experience over the coming 30 days. StockVix is a novel approach to customizing a well-known and widely trusted risk gauge—the VIX. Samurai’s team of quants have multi-decade experience in options trading, volatility pricing, and risk analytics. Leveraging this expertise, StockVix provides wealth managers, traders, and risk officers with a truly unique view into future market expectations and short-term trading biases on an individual security basis.

DriveFlow—a unique market structure analytics tool for advisors, dynamic traders, portfolio managers, and hedge funds. The solution helps shed light on the markets by cutting through the trading noise to deliver a real-time look into the actual drivers of individual securities. It helps users understand how and why a stock is performing a certain way and determine if there is real conviction behind the move, which is key to market timing and overall portfolio analysis.

RelativeVol—a forward-looking signal which gives relativity to current market pricing of future volatility expectations in a given security. RelativeVol dynamically compares the market’s pricing of future volatility expectations versus historical volatilities in that same security, helping users understand the relativity of the market’s future volatility pricing, rather than just the absolute magnitude of said expectations.

RiskPulse—a predictive sentiment indicator which combines Samurai’s deep options experience with AI to deliver an intelligence tool that synthesizes investor bias on a relative basis. RiskPulse sifts through billions of data points daily to present users with a quantifiable, fully objective view of the probability of a given security experiencing a true outlier type move (>2 Std Dev), over the coming 30 days, relative to all other securities on the same date.

Created with Science, and Honed Through Experience

One of Samurai’s earliest clients was a $500 million hedge fund, which followed mostly traditional fundamental research, with limited quantitative analysis layered on top.

They met Samurai Data Analytics at an industry conference and indicated their need for an idiosyncratic alpha-generating signal. Samurai started showing them results with the Samurai Signal™, their flagship product and began backtesting it for the client to optimize their existing strategy. Within a few short weeks, the hedge fund was able to uncover idiosyncratic alpha and improved their performance by nearly 10 percent each month.

As a company, Samurai is always trying to improve by listening and learning from customers. There is consistent research, attention to standard practices, and QA, to ensure the quality of their products. As Meyers reiterates, “Much of our product roadmap and on-going research really stems from the response and feedback we get from our customers.”

Samurai’s current focus is on the idea of generating easily digestible intelligence that a human being can understand. As they see more outreach and engagement from traditional wealth managers, the paradigm has changed quite a bit. They have really pivoted from their original quantitatively-presented solutions, and are now iterating on products that deliver a much more easily comprehendible view of the data.

The company is constantly striving to improve their offerings by listening to their customers’ needs and then engineering solutions that not only meet but far exceed their expectations. “Nothing is more important to us than the success of our clients. If they don’t succeed, we don’t succeed. Our mission is to empower capital market participants to flourish; and we achieve this by delivering innovative, AI-driven solutions that solve their unique problems,” adds Frederick.

Moving forward, the predictive analytics of Samurai will undoubtedly reach a far greater audience, as wealth management firms, asset managers, PMs and analysts more broadly adopt these cutting edge intelligence solutions and risk management tools.

- Andy White
    September 21, 2020
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Samurai Data Analytics

Company
Samurai Data Analytics

Headquarters
New York City, NY

Management
Adam Frederick, Co-founder & CEO and Rob Meyers, Co-founder & CIO

Description
Samurai Analytics is a financial analytics firm and leader in capital markets intelligence, trading solutions and risk management tools