New York – In a recent article Cameron Hight, founder and CEO of Alpha Theory™, mentions that he had recently asked a portfolio manager whether the 5 best ideas in his portfolio were also the 5 biggest positions in his portfolio. The PM didn’t know the answer to that question and that, in a nutshell, is why Alpha Theory™ exists. Every now and then, Integrity likes to highlight one of the more than 3,000 (and growing) research providers in its proprietary database. In this ResearchWatch article, Integrity would like to introduce readers to Alpha Theory™, a platform which helps PMs manage their portfolio by taking into account risk-adjusted return.
Alpha Theory™ is a patent-pending ‘Fundamental Portfolio Management Platform’, created by Cameron Hight, CFA the firm’s CEO. The software is designed to give investors a real-time framework to distill research on each asset’s position into a risk-adjusted return that is then used as the foundation to maximize risk-adjusted return for the entire portfolio. Alpha Theory™ points out where portfolio positions are not aligned with the investor’s assessment of expected return and risk. Essentially, the software helps to bridge the gap between the analytical assessment of a price target and the probability that target will be hit with the size that position takes in a PM’s portfolio. The software helps to manage the size of all of the different positions in a portfolio with the analysis centered around the positions on an ongoing basis.
In addition, the software provides research management, position size optimization, risk management, portfolio analytics, and analyst performance measurement. Alpha Theory’s™ proprietary software was created in 2005. Before founding Alpha Theory™, Mr. Hight worked in the investment industry for 10 years, where he supported over $20B in transactions primarily covering technology companies.
Alpha Theory™ was most recently in the news back in November when IRC securities added them to its Research Prime Network. The addition was touted by the CEO of IRC Securities, Brian O’Day, when he said that “Alpha Theory’s™ differentiated approach towards constructing portfolios has assisted the asset management community in maximizing their research and ideas to gain performance in the real world.” Mr. Hight has also written articles featured in Institutional Investor magazine, his most recent being published in November of 2009 and discussing the problems concerning company dividends. In addition, Mr. Hight writes a blog which can be accessed on his website.