NumeriX, the independent leader of analytics for structured products and derivatives, and RiskVal, a leading provider of fully integrated credit and fixed-income trading and risk management systems, have announced a strategic partnership whereby RiskVal has integrated NumeriX enhanced market standard analytics to enhance the breadth of its trading and risk management solutions, providing users the ability to manage derivative products across all asset classes.
RiskVal will offer NumeriX’s suite of industry standard models, which have been enhanced to ensure greater speed and pricing accuracy. NumeriX analytics suite covers fixed income, credit, foreign exchange, hybrids, cross currency, inflation rate and equity derivatives.
In addition to NumeriX’s full suite of cross analytic solutions, fixed-income and credit users will also have access to NumeriX’s revolutionary dynamic credit model, a two-dimensional Markovian model introduced last year, which is the most sophisticated tool for the valuation of complex CDOs. The dynamic credit model incorporates the market risk related to the volatile spread movements that typically occur even in the absence of defaults. Users will also have access to NumeriX’s new pricing tools for LCDS and LCDX. Given the volatility of the market, this feature is critical in modeling and evaluating sophisticated credit products.
"The key challenge is that many in-house systems cannot adapt to the constant trading fluctuations within complex markets," said Steven R. O’Hanlon, president and coo of NumeriX. "As economic conditions make certain security types more attractive across market verticals, traders need the flexibility to pursue profitable strategies across all markets. When the deals are done, they need to be booked and managed throughout many levels of an organization. One thing is for certain, the market doesn’t wait for upgrades, builds and software patches."
While today’s announcement is focused on the firm’s collaboration to offer a commercially available integrated solution, the firms have also worked together on a bespoke project for one of the world’s leading investment banks. Together, NumeriX and RiskVal improved the business functionality of the institution’s proprietary trading desk by developing a flexible and easy-to-use credit system, with deep modeling capabilities. The firms also built-in the ability to structure, price and evaluate CDOs and other complex credit products therefore providing the desk the ability to effectively managing CDO lifecycles through graphical user interfaces.
Users also have the benefit of support, unparallelled by any other third-party solution available in this market. Combined with RiskVal’s industry knowledge and experience, users will have access to NumeriX Financial Engineering Group, most of who are Ph.D.’s or hold advanced degrees in finance. This unique client facing group, whose size rivals those of some companies in this market, ensures a dynamic feedback process whereby NumeriX’s products are continually enhanced with the latest model innovations and user requirements.
"I am very excited about the partnership with NumeriX. It brings the best of both companies in providing the leading quantitative and financial engineering solutions for the financial industry. I look forward to our evolving successful and fruitful partnership with NumeriX," said Jordan Hu, president and ceo of RiskVal.