Algo-Axioma Alliance Will Benefit the Buy Side

Toronto-based Algorithmics will now offer its buy-side clients data derived from Axioma's multi-factor equity models as part of its Algo Risk Service.

Toronto-based Algorithmics, a specialist provider of sell side and buy side risk technology and services, has announced an alliance with Axioma, a provider of multi-factor equity models, which, according to Algorithmics, will benefit both firms' buy-side clients.

Algorithmics will offer data derived from Axioma's multi-factor equity models as part of its Algo Risk Service, the firm's hosted portfolio construction, risk management and reporting service, an offering that won the best risk/portfolio analytics product category in the 2008, 2009 and 2010 Buy-Side Technology Awards.

According to Algorithmics, there is demand for customized risk solutions that offer a choice of data sources and modeling options. The combined proposition addresses this need by merging Algorithmics' risk solutions and data derived from Axioma's proprietary equity models.

Axioma risk models offer a range of regional and style-base models that are recalibrated daily, with re-estimations and production of factor exposures, covariance matrices, and asset specific risks. This daily recalibration strategy is significant in the sense that equity factor models tend to be recalibrated only on a monthly basis.

With Axioma data available through Algo Risk Service, Algorithmics' clients can draw on reports from Axioma's multi-factor equity models to improve their equity coverage and consistency between their front and middle offices.