Growing market indicators are pointing to potentially prolonged period of recession, i.e. increasing inflation, volatility, continued rate increases, bear market trends, etc.
Real-time stress analysis, including both historical scenarios and hypothetical scenarios, can help managers not only enable proactive portfolio management but also help communicate the same to investors.
To enable such capability, buy-side firms need to first focus on centralizing their data management. This will help easily integrate with various systems that provide derived data for such analysis.
Also, using modern ‘cloud’ architecture for scalability and an experienced team with proven ‘domain’ knowledge will ensure success in implementing such a strategy.
