Peracton: A Smart Search for Investments
Trading in stocks and financial markets can be a complicated process. A cursory glance at the news at any time over the last five years would tell you that even the so-called experts have a tendency to get it wrong more often than not.
Laurentiu Vasiliu, a researcher at the Digital Enterprise Research Institute (DERI), at NUI Galway, founded Peracton to help both individuals and corporate multinationals negotiate the complicated and volatile stock markets.
Laurentiu was not initially motivated by any desire to enter the financial sector, though. Rather, he was led to the markets by his team at DERI’s research, which lent itself particularly well to the complexity of financial investing.
“We initially started our research looking at complex decisions and negotiations. So it was more a kind of theoretical approach,” says Laurentiu, who originally hails from Romania.
“We started an R&D project with Enterprise Ireland initially. We always knew that this could have multiple applications, and finance was one of them.”
The research project with Enterprise Ireland yielded MAARS, which stands for Multi Attribute Analysis Ranking System.
The MAARS platform algorithms can analyse the hundreds of parameters, across thousands of stocks, to show any would-be investors what options most closely mirror their desired investment portfolio.
If you are looking at US stocks on the main exchanges like NASDAQ, or the New York Stock Exchange,” explains Laurentiu, “Altogether there are maybe 4,000 stocks, and each stock describes up to 200 financial parameters.”
For an investor who wishes to exercise due diligence in their financial dealings, the sheer level of detail involved in analyzing hundreds of stock options, renders it impossible to do so, “The human brain just can’t work in this way” he says.
The tools which currently exist to help investors analyse stocks are, says Laurentiu, “Quite primitive," in only flagging as suitable stocks which exactly match your investment criteria.
“With this approach, an investor would lose many good stocks. Even if they have a very good strategy they could get only 60 percent of the eligible stocks that are out there. They would miss 40 percent. And who knows? Maybe there are really good stocks they just can’t see.
“So, this is what our algorithm does, it’s able to trawl the mass of equities and extract the closest fit and they are received in a ranked order.”
There have been attempts, he says, by the big financial houses to design similar programs, but there is no room for error in the world of finance.
“This is not trivial research. For somebody who wants to choose between ten types of apples, you don’t need a complex algorithm, but if you want to spend a half million dollars in one go for a particular set of stocks, then proper research and due diligence have to be exercised.
“There are many things to be taken into account as algorithm stability and algorithm flexibility. To add as many parameters as you want and go for as many stocks as you want, and at the same time to be safe and consistent,” he says.
For this reason, Peracton’s MAARS platform is not suitable for amateur investors, and some experience of finance and stock markets is necessary.
“This is a professional tool for traders but also we are looking at investment clubs, who know more about investments,” says Laurentiu.
Peracton currently employs three people in Galway, and one in Dublin. Two employees are based in Oxford, England, while three employees are based in the United States, divided between Boston and Silicon Valley.
There is currently some revenue coming in from deal with a major financial house, details of which Laurentiu is keeping firmly under wraps, and the plan is to develop the Irish, UK and US markets, before moving on to Asia and the Middle East.
For now, the focus is on constantly improving the product. “Every six months we are releasing new versions of our equity selectors.
“We are addressing stocks, mutual funds, bonds, ETFs, so we have modules for different types of equities. And we are improving and adding more and more functionality also for the user.”