In traditional finance, professionals look at a wide range of factors. For example, some factors can come from a stock’s fundamental data, like earnings, revenue, debt ratio, etc. Some factors can come from valuation of a stock, like PE ratio, PB ratio and EV to EBITDA. There are also technical factors which include many of the signals we have built into CoinShell. Then there is also the momentum factors. However, in crypto market, the most important factor is the momentum factor. It is often the only important factor given how crypto market tends to more in trends. That is why we are paying close attention to momentum factors during our proprietary research in factor models in CoinDr.
In alpha version of CoinDr, we have released our first paper in the advanced factor series. It looks at momentum factor in its most common way. But there are more savvy ways you can build the momentum factor. In an academic paper by Chen, Wang and Yu, “The Formation Process of Winners and Losers in Momentum Investing”, they have put forward a more advanced type of momentum factor by considering both how fast prices move in a trend and whether the trend of the movement is accelerating. They have shown that the combined factor outperforms traditional momentum factor when it comes to the US stock market. During BANCA’s proprietary research and backtesting, this combined factor seems to work as well in the crypto market. We are now building this factor into another paper in the factor series, together with “101 factors” that we have mentioned in our last update.
We have uploaded three research reports this month on CoinDr.
- Research and development of CoinDr beta version continue.
- Bug-fixing of existing products and maintenance of database continue.
The BANCA platform serves the global cryptocurrency community. BANCA’s dynamic eco-chain uses AI and expert system that includes automatic management. The BANCA platform analyzes Big Data and delivers precise services tailored to the specific needs of our individual users.