In the trading world, Alpha is a measurement of performance on a risk-adjusted basis. Alpha Modus Research is helping traders navigate the stock market using data to identify cognitive biases (or deviations from the norm) in market behavior.

Prashant Bhuyan, cofounder and CEO of Alpha Modus Research, spoke with the John Furrier and Dave Vellante, co-hosts of theCUBE, from the SiliconANGLE Media team, to discuss how Alpha Modus Research is using data to change investment strategies.

Uncovering buried data

Alpha Modus Research spoke at the IBM InterConnect event, demonstrating the value of using data. The company started in 2014 as an investment technology company, and the goal is to ultimately reprice investment advice.

“The way we do this is by looking at predictive patterns in market behavior that is buried in unstructured data, natural language,” Bhuyan said. “We discovered Bluemix [IBM Bluemix] organically … suddenly, when we incorporated the Bluemix APIs, we could incorporate Tweet insights, natural language processing into our new model making to improve the accuracy of our old models.”

Bhuyan explained that after adding the natural language processing element, the company was able to improve their predictions by a factor of five.

Strategy vs. Robo investing

The key distinction between Robo investing and what Alpha Modus Research is doing comes down to active and passive action. Robo investing mimics the index for free, where Alpha Modus Research focuses on active management by saying, ‘Let’s beat the market on a risk-adjusted basis.’

Alpha Modus Research is cloud native, and the technology behind the company’s insight process is deployed on the cloud through IBM. “Bluemix and Watson are helping to unleash creativity by expanding our intelligence,” Bhuyan explained.

Watch the full interview below, and be sure to check out more of SiliconANGLE and theCUBE’s coverage of IBM InterConnect 2016. And join in on the conversation by CrowdChatting with theCUBE hosts.

Photo by SiliconANGLE