Real Time Credit Default Analytics

Credit Default Prediction

About AlgoCircle

AlgoCircle was founded to help firms operating in the financial services industry with algorithmic solutions that automate the extraction of research intelligence from structured and unstructured data. We use the tools of machine learning and big data to glean insights that human researchers cannot independently generate!

The Underlying Principle

Traditionally credit analysis is a number crunching game and with CreditPulse we aspire to transform the way credit analysis is done and bring an additional tool for the fund managers.

Our underlying principle is that ‘texual analysis’ can give insights better than just number crunching and it is free from manipulation! Our Machine Learning techniques carry out textual analysis by comparing texts from companies’ SEC filings with those of bankrupt companies just before their bankruptcy filing.

Our daily output then categorizes companies into either 'High Risk' or 'Low Risk' for the upcoming two to three quarters. This information is immensely useful to risk management professionals and hedge fund managers.

Our Mantra

Generate Alpha Reduce Risks

In the month of February 2016 CreditPulse was as follows:

  • Total No of companies analyzed:1,884
  • Companies predicted as high risk:86 (4.56%)
  • Companies predicted as low risk:1,798 (95.44%)
* With 0.6 threshold

Key Takeaways

  • Accurate Output is available within just 4 minutes of a SEC filing, providing valuable lead-time
  • Bond traders : get all the insights required to deal in high yield debts
  • Hedge Fund Managers : create a 'short equity portfolio' or diversify an existing portfolio