SPONSORED CONTENT | Trend Intelligence


10 Ways IROs Benefit From Trend-Following


Trend-following analytics give IR professionals clearer


insight when strategizing and communicating. BY ADRIAN DACRUZ, CEO, TREND INTELLIGENCE


more data-driven and systematic, using strict mathematical rules for portfolio construction and execution. Discretionary stock and bond picking is in-


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creasingly an investment style of the past, being rapidly replaced by quants, big-data sets and algorithms that can better select stocks and bonds compared to emotional humans with our biases. Half of investors now select stocks and bonds


y now you know that institutional investors and their decision-making processes have evolved to become


based on passive, statistical, volatility or mo- mentum factors. Increasingly insignificant is the fundamental strength of your company’s earnings, balance sheet or cash flow. This has been a creeping and significant change to the long-


FIGURE 1. News often lags stock price changes and misleads market watchers. Trend-following provides invaluable leading signals that always follow prices.


standing ”active management” paradigm that dominated the investor relations (IR) community for decades. The new question is, “How should IR teams adapt to these new investment styles that have almost no regard for company data or story lines?” Trend Intelligence’s answer is for the IR profession to un-


derstand trend-following analytics and algorithms in the same way that these investors do. Armed with this new statistical insight, IR professionals can follow and accurately anticipate major price trends in their company stock. IR professionals are also empowered to better manage the


future by considering statistical price trends in the major stock indices, their industry peer group, or commodities or currencies that impact their business.


1 2 FA LL 20 2 5 ■ IR UPDAT E


‘Trend-Following’ Algorithms Empower IR Professionals to See the Future Trend-following investors seek to mathematically uncover and then capitalize on visible trends in asset prices that occur over time. Tis is a highly predictive, data-driven investment strategy. Many famous investors and economists have added their expertise to this invest- ment genre over the last century, with trend-following being adopted by many of the world’s most successful hedge funds since the 1980s. IR professionals need to understand trend-following algorithms


for two main reasons: All prices, across all assets, trend. Understanding the status of


a price trend in your company stock (or peer’s stock) is powerful knowledge and facilitates effective company decision-making and investor communication—either as a trend plays out or as it changes direction.


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