Analytic Space is robust and versatile risk management framework that supports model validation/monitoring and rapid model deployment. Most financial organizations employ a traditional model development and deployment process that requires multiple development and staging environments.
Once deployed, many financial institutions fail to quantify and monitor pricing model uncertainty on a daily basis. This can be quite costly as often significant resources need to be allocated to model correction/reconciliation and a repeat of overnight risk and P&L calculations.
Given the common practice of acquiring/managing market data and pricing models as separate and independent activities, many financial institutions fail to understand the dependence of a pricing model on the underlying market data. The outcome being the lack an easy and effective processes to quantify model uncertainty vs. risk allocation vs. regulatory cost of capital.
By amalgamating market data, pricing models and risk analysis into a centralized service, Analytic Space provides a flexible and robust risk management framework for assessing model uncertainty and rapid model deployment. Analytic Space provides users easy access to both new and existing pricing models and market data sets allowing for in-depth model analysis and performance assessment. Benefits include:
- New pricing models (even during prototyping) can be used in parallel with production models
- Model validation becomes a part of a daily routine process
- Ability to test a multitude of potential market scenarios, including asymptotic and stress test scenarios