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From Data to Decisions: Leveraging Contextual Views for Better Valuation Risk Assessment

Reading time: 5 min   |  By Sonia Chopra   |  Published in Articles,

Valuation and product control teams currently face significant challenges in managing and analyzing their OTC derivative data. They must spend substantial resources on data consolidation and data wrangling in order to understand, compare, and contextualize their pricing, positions, and risk.

The overall process is further complicated by the need to manually move data between disparate platforms, leading to errors and inconsistencies. These labor-intensive workflows detract from operational efficiency and make it difficult to maintain accuracy in risk assessments and pricing decisions.

Additionally, the lack of transparency in pricing models and insights further burdens analysts who need to justify their calculations to stakeholders. Regular tasks like identifying outliers, conducting investigations, and documenting errors are time-consuming and error-prone, increasing the risk of mispricing and potential regulatory penalties.

To address these inefficiencies, firms need a risk solution that provides a holistic, contextual understanding of their data by consolidating information, enhancing visibility, streamlining processes, and delivering reliable and actionable insights.

Cuneiform for Valuation Risk: Contextual Views

Cuneiform® for Valuation Risk is an intuitive risk solution that provides unified and contextualized views of instrument prices and third-party pricing datasets overlaid with client-specific trade, liquidity, and market data. This includes data-science based metrics presented through time-series analytics, fair-value and comparative consensus calculations, end-to-end lineage, and customizable dashboards.

With access to both a high-level summary and comprehensive drill-down capabilities, the solution delivers a targeted approach tailored to client-specific needs. With an easily navigable interface, firms can visualize, customize, and share insightful heatmaps, premium charts, and instrument views to help contextualize and affirm their pricing data.

Through workflow mutualization, individuals can save valuable time and resources, allowing them to prioritize and concentrate on their most impactful insights first.

How can Contextual Views Help Your Organization?

The solution helps you gain a contextualized understanding of your data within the trade landscape – to save you time and money. It also offers:

  • High-level view of positions, liquidity, and volatility to quickly identify where risk is most concentrated.
  • Comprehensive drill-down capabilities to analyze underlying data behind your positions.
  • Instrument standardization with asset-specific metrics for specialization.
  • Transparency and traceability into calculations and approaches for seamless auditability.
  • Historical and time-series data for real-time trend analysis and exception management.
  • Shareable views for internal collaboration and documentation.

Types of Contextual Views

Cuneiform for Valuation Risk offers three types of contextual views, each with a different purpose and goal.

Heatmaps

Heat Maps for Contextual Views

Heatmaps deliver a detailed visualization of critical metrics, such as the total and fine-grained observed liquidity of trades available in a given valuation area and time period.. With the ability to drill down into specific data points, you can customize your dashboards to fit your specific liquidity needs.

Premium Charts

Premium Charts for Contextual Views

Premium Charts offer an enhanced view of consensus and evidence statistics relative to submitted prices. With Premium and Implied Volatility modes, you have the flexibility to explore premiums and delve deeper into Bachelier and Black Vols with full transparency at every step. The comprehensive approach visualizes your internal pricing, trade, broker, Consensus, PruVal, and statistical data all in one place. With the trade time-series view, you are able to compare the instrument type, relative strike, absolute strike, reported price, etc over-time in both a 3-D graph and table format.

Instrument Views

Instrument Views for Contextual Views

Instrument Views features an extensive set of consensus and evidence data for a specific instrument, ensuring you have complete context of the instrument position within the market snap. It incorporates an extensive set of evidence, which may be used to identify and understand the root-cause of an issue.

With trade-time series, you can easily view key information about certain trades at a particular point in time. Easily understand trade activity, including notionals, liquidity, and prices to identify how much data you have available to help you verify the most accurate price for a particular point.

Cuneiform for Valuation Risk provides you with a complete 360-view of the trade data landscape to contextualize your data and deliver valuable insights for improved price comparison, trend analysis, and risk management.

Contact Us
Please reach out today for more information or to schedule a demo. Take the next step towards redefining your valuation risk management strategy.

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By Sonia Chopra

Sonia Chopra is PeerNova's Product Marketing Manager for the Valuation Risk product line. She has nearly a decade of marketing experience and has been with PeerNova for eight years. She specializes in crafting content and campaigns that address the complexities of product and valuation control, such as market volatility, asset pricing discrepancies, and regulatory compliance issues. Her ability to articulate the intricacies of these challenges, enables her to develop highly effective product marketing strategies that meet the evolving needs of the industry.

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