How Quoniam boosted its sentiment strategy by adding an LLM
The asset manager’s upgraded system creates scores from more-informative forward-looking parts of news.
At a time when buy-side firms are seeking ways to boost quant strategies using large language models, Quoniam Asset Management says an LLM upgrade of its news sentiment model in February lifted one fund’s Sharpe ratio by a fifth.
By adding an LLM to its system to score news sentiment, the Frankfurt-based quant equity manager says it can now derive scores from the parts of news that relate exclusively to the future—that’s to say, the parts most likely to move markets.
“The LLM ignores the past and
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