Eon Labs Ltd. Unveils Novel Trading Strategy Assessment Tools, Reinventing Algo-Trading Compensation Structure in Managed Sub-Accounts
Source: Notion | Last edited: 2023-10-31 | ID: 3c70427b-7c2...
Vancouver, BC, Canada, Jun 26, 2023 - Eon Labs Ltd., a leading Canadian fintech company, is transforming the algo-trading landscape with the introduction of two novel performance metrics and a comprehensive risk management system. These groundbreaking innovations aim to enhance the evaluation of trading strategies for Managed Sub-Accounts (MSAs), ensuring a performance-based and fair compensation structure for Algo-Trading Strategy Researchers (ATSR).
Central to this cutting-edge approach is the rolling Crossover Count (CoC), a dynamic metric that evaluates the robustness and profitability of trading strategies. CoC provides a detailed assessment by analyzing the frequency at which a strategy’s gains surpass its losses. “It’s an innovative tool that gives us a detailed understanding of a strategy’s risk versus reward dynamics. The rolling nature of the CoC provides a dynamic assessment, capturing fluctuations that traditional metrics may overlook,” explains Chen Li, Founder & CEO of Eon Labs.
Li further expounds that the rolling CoC is intimately linked to the Risk Return Ratio (RRR), as its foundation rests on the concept of Return Retracement Ratio (RRR). The CoC adds a count each time a new RRR > 1 event occurs in the cumulative profit and loss. A high count signifies a strategy with a regularly strong RRR, underscoring frequent instances where the strategy’s gains surpass its losses. “This gives a level of assurance that profits aren’t the result of sporadic performance but steady, resilient behavior,” Li added.
Furthermore, Eon Labs has set stringent standards by accepting only strategies where the rolling RRR is larger than one during the entire backtesting period. This rigorous Evaluation criterion ensures that the investments not only have the potential to recover from any possible drawdown within the Investment Time Horizon (ITH), but also exhibit the capacity to exceed their previous equity peaks, matching the earlier risk magnitude. This comprehensive approach ensures a more balanced and resilient portfolio performance in MSAs.
Complementing these metrics, Eon Labs has also introduced the Trailing Maximum Acceptable Drawdown (TMAD). Unlike conventional drawdown measures, TMAD is forward-looking, setting an acceptable limit to potential losses based on the strategy’s current all-time high (ATH). This innovative measure dynamically adjusts risk parameters in line with the strategy’s success.
Another noteworthy innovation is the Safety Net Reserve Fund (SNRF), operated by Eon Labs Ltd.. It reserves a portion of the ATSR Fee to cushion potential losses. If an MSA breaches the pre-agreed performance matrices, funds from the SNRF are used to mitigate losses from the last recorded All-Time High (ATH). In cases where the WBUF matrices remain unbreached, the ATSR Fee held in the SNRF will be disbursed to the partnering ATSR over the pre-agreed number of ITH, or more formally, Settlement in arrears.
Co-Founder and CBO, Victor Hogrefe, notes, “Through our innovative metrics and stringent risk management measures, we ensure that our partners are rewarded fairly for their success while protecting their investments from undue risk. It’s about striking the perfect balance between aggressive returns and diligent risk management.”
Eon Labs has been working closely with prominent recruitment agencies, including H.W. Anderson, Shelby Jennings (Phaidon), Cerebro Search, and Alexander Chapman, to find talented ATSRs. These partnerships aim to create a mutually beneficial ecosystem that maximizes profits while minimizing risks, ushering in a new era in the algo-trading landscape.
About Eon Labs Ltd. Eon Labs Ltd. is a Canadian fintech company based in British Columbia that trades its proprietary fund in the financial market. Founded in 2021 by Chen Li and Victor Hogrefe, the company uses cutting-edge financial technology solutions to optimize trading strategies. It operates without venture capital, financing its operations solely through its resources.
Press Contact: Terry Li, Director of Operations terry@eonlabs.com 604-300-8878