Solutions

Matricesight's model focuses on developing indicators that assess current and near-future risk aversion and sentiment in the equity market. Our approach integrates economic and financial research with advanced quantitative models to produce indicators that provide a more timely and accurate evaluation of equity investor risk attitudes. The models we use and the indices they generate have consistently demonstrated strong performance in assessing and predicting investor risk aversion. Notably, some of these models have been in use since 1997 and have successfully anticipated significant turning points in the U.S. equity market.

Matricesight U.S. Equity Market Risk Aversion & Risk Attrition Index

The indices are designed to gauge and anticipate the level of risk aversion and sentiment among stock market participants over time. When the index shows a positive value, it indicates that risk sentiment is deteriorating, causing equity investors to become more risk-averse and anxious. This shift could result in a period of negative returns in the stock market. Conversely, when the index reflects a negative value, it suggests that risk sentiment is improving, leading equity investors to feel more optimistic and willing to take on more risk, which can result in a period of positive returns in the stock market.