The Skopos Labs team of A.I. researchers, data scientists, software engineers, financial professionals, attorneys and policy experts have developed a comprehensive automated platform that predicts the impacts of policy-making on thousands of companies and financial markets.
Top firms and companies have invested in Skopos, including Thomson Reuters Ventures, Saltwater Capital, multiple venture capital funds, and the strategic investments group of a Tier 1 investment bank. Organizations such as Thomson Reuters, Politico, GovTrack.us, and investment banks trust Skopos predictions every day.
Every day, for each U.S. company, Skopos A.I. estimates the level of positive or negative exposure that company has to recent policy proposals from the political parties. We use rolling averages of these underlying policy-company impact predictions to then automatically construct market-neutral long-short portfolios that isolate the incorporation of election information into securities prices. We also construct long-only portfolios for investors that cannot take short positions. The portfolios are periodically rebalanced to construct the Skopos Political Indices using a purely systematic process.
In these interactive charts, the Republican portfolio performance in 2016 is displayed in red and the Democratic portfolio performance in blue. The portfolios captured post-election resolution of uncertainty very well. The 2016 performance also demonstrates that investors could have used the Skopos Political Indices to take views on the outcome before the election.
Essentially, these indices track the market's collective prediction of the election outcome and its effects on the market. For 2020, the underlying portfolios allow investors to take views on the election outcome and hedge their exposure to election risks.
The performance of these indices track the market's current expectations about the electoral outcome and allows investors to take differentiated views or to hedge their exposures. The portfolios are rebalanced every 10 days to track new developments in the underlying data.
For more on the potential market impacts of the 2020 election, see this note, in which research teams at Morgan Stanley identified election outcome scenarios and drew on predictive data from Skopos to illuminate the possible investment implications.
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