QuantCube Introduces Crude Oil Risk Sentiment Indicator – Using NLP in Arabic and English to Accurately Capture Risk and Predict Price Movements
- Data , Risk Management
- 22.10.2021 09:20 am
· Arabic social media data increases the information available on crude oil more than five-fold, creating the most comprehensive crude oil sentiment indicator in the market
Alternative data specialist QuantCube Technology, today announced the availability of the QuantCube Crude Oil Risk Sentiment Indicator. By processing sentiment data in relation to crude oil in Arabic as well as English, QuantCube has created the most comprehensive real-time indicator available for the commodity.
By employing social media analytics in both Arabic and English, alongside QuantCube’s proprietary Natural Language Processing algorithms and a specific dictionary tailored for the crude oil market, the QuantCube Crude Oil Risk Sentiment Indicator is able to accurately capture short-term risks in the market. It processes multiple factors impacting crude oil prices in real time, including OPEC meetings, production and stocks. As a result, the indicator can provide insights several hours in advance of traditional news outlets, giving commodity traders and hedge funds an edge in the market.
“Our Crude Oil Risk Sentiment Indicator is a must-have for clients interested in commodities such as crude oil and is used to derive short term investment signals,” explained Thanh-Long Huynh, CEO of QuantCube. “By capturing social media sentiment in Arabic, as well as English, we are analysing more than five times as much data as our nearest competitor and delivering much greater accuracy. The result is derived investment signals that are performing well and generating consistent Alpha.”
Alongside QuantCube’s international and commodity trade indices, powered by AIS Shipping data, the QuantCube Crude Oil Risk Sentiment Indicator provides real-time insights on the supply side for commodity and energy futures traders. When the indicator is also used in combination with QuantCube’s Macroeconomic Intelligence Platform – incorporating real-time macro variable indices for GDP, Consumption, Inflation and Employment – it enables users to assess overall demand trends, and to anticipate economic and trade trends.
The QuantCube Crude Oil Risk Sentiment Indicator is computed over a 24-hour period and refreshed every day. The indicator varies from 0 to 100 and provides information on current social media risk perception for the crude oil market. Investment signals can be derived from the absolute level, as well as from the short-term acceleration, looking at the data over a period of 2-6 days. Readings above 65 are considered very high, and below 35 very low. If the risk is high, the indication is that prices are expected to fall.
“QuantCube carried out a successful pilot of the indicator before launching it to market this month,” explained Huynh. “QuantCube has proven success in accurately processing large data sets in different languages using NLP models. We have used NLP techniques to analyse sentiment data to predict the outcome of elections more accurately than the polls.”