17.6 NORM USES SEMANTIC NEWS ANALYSIS TECHNOLOGY
The technology that NORM uses to achieve these goals is semantic analysis of financial news messages. We define “sudden market changes” as being preceded by significant events that appear in financial news and affect one or more companies. NORM focuses on the equity market, which enables it to restrict the definition of “events” to things that affect the value of one or more equities. These events are, for example, not only company takeovers, mergers, changes in C-level management, etc., but also market-dynamic changes such as oil price changes and regional instability around production facilities.
A state-of-the-art semantic analysis technology is used to automatically detect events in the news and correlate them with the occurrence of sudden market changes. In order to distinguish between relevant and irrelevant events, a dataset of 20 years of financial news history will be analysed and compared with the intraday market values of a set of selected equities. This can be used to test the three goals described above. Subsequently, a proof-of-concept application will be constructed that implements the results, can run on current news and market data, and will be tested by selected early adopters.
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