Business Unit News
New Dow Jones Lexicon Analyzes Patterns in the News to Create More Powerful Trading Strategies
Custom Solution Uncovers Trends Behind the Headlines
NEW YORK, April 21, 2010 – For the first time,
traders, quantitative analysts and asset managers can analyze
complex patterns within market-moving Dow Jones news to develop
predictive and profitable trading strategies. Dow Jones Lexicon,
unveiled today, gives traders the ability to incorporate
sophisticated news analysis directly into their trading models
and strategies – or derive entirely new ones.
Dow Jones Lexicon, powered by derived data technology that
converts news content into measurable, actionable data, examines
massive volumes of Dow Jones real-time news, identifying crucial
words and phrases that signal trends or patterns. The words are
analyzed for sentiment, frequency and other relevant analytics
based upon proprietary dictionaries that determine the “tone” of
the news. Researchers and traders use this data to build
customized indicators and deploy them as part of trading models,
uncovering new opportunities and creating measurable competitive
advantage.
“Dow Jones Lexicon represents the next frontier in analytics by
providing traders, quants and researchers with new ways to
uncover trends and opportunities,” said Rob Passarella, vice
president and managing director of institutional markets, Dow
Jones & Company. “We all know that news moves financial markets,
but the challenge has always been to quantify the news in
multi-factor models and analysis. By taking large collections of
business news content and analyzing it to identify factors that
can cause significant shifts in the market, traders can quickly
take advantage of trading windows that can open and close
without warning.”
Dow Jones developed the custom dictionaries based on feedback
from several academics who acknowledge that high-quality data is
paramount to any trading strategy.
“Relevant economic information goes beyond the accounting
numbers,” said Bill McDonald, professor of finance, University
of Notre Dame. “Sentiment analysis provides a method to assess
the massive amounts of extant text in milliseconds and its
success is critically linked to the quality of the underlying
dictionaries.”
Dow Jones Lexicon is available as an XML-based feed and can be
paired with Dow Jones’s real-time text feed or archival content.
It can also be applied to custom dictionaries so that firms can
leverage existing in-house research to build models while
deploying Dow Jones Lexicon to process news content.
To learn more about Dow Jones Lexicon, visit
www.dowjones.com/algo/product-djlexicon.asp and for more
information about Dow Jones, visit
www.dowjones.com
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About Dow Jones
Dow Jones & Company (www.dowjones.com)
is a News Corporation company (NASDAQ: NWS, NWSA; ASX: NWS,
NWSLV; www.newscorp.com)
and a leading provider of global news and business information.
Its principal products include The Wall Street Journal, Dow
Jones Newswires, Dow Jones Factiva, Barron's and MarketWatch.
Through its Local Media Group, Dow Jones operates
community-based newspapers and Web sites. Dow Jones also
provides news content to television and radio stations.
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Contact:
Shannon Sullivan
Dow Jones & Company
Office: 609.627.2312