Podcast on Hypercubes by Paul Cottrell.
This is a quick demo of Poseidon's future direction in Virtual Reality.
Poseidon is from Greek mythology. In Wikipedia the following is written.
Poseidon one of the twelve Olympian deities of the pantheon in Greek mythology. His main domain is the ocean, and he is called the "God of the Sea". Additionally, he is referred to as "Earth-Shaker" due to his role in causing earthquakes, and has been called the "tamer of horses". He is usually depicted as an older male with curly hair and beard.
The name of the sea-god Nethuns in Etruscan was adopted in Latin for Neptune in Roman mythology; both were sea gods analogous to Poseidon. Linear B tablets show that Poseidon was venerated at Pylos and Thebes in pre-Olympian Bronze Age Greece as a chief deity, but he was integrated into the Olympian gods as the brother of Zeus and Hades. According to some folklore, he was saved by his mother Rhea, who concealed him among a flock of lambs and pretended to have given birth to a colt, which was devoured by Cronos.
There is a Homeric hymn to Poseidon, who was the protector of many Hellenic cities, although he lost the contest for Athens to Athena. According to the references from Plato in his dialogue Timaeus and Critias, the island of Atlantis was the chosen domain of Poseidon.
Poseidon is also software developed by Reykjavik, which is my research trading company. In terms of the history of Reykjavik and the software development of Poseidon, let’s start with the genesis of Reykjavik. Reykjavik is my research and trading company, whereby all my proprietary trading and financial research is developed through it. Reykjavik is established in the financial district of Lower Manhattan. There are two main reasons for the name of the company. First is that during the winter Lower Manhattan is extremely cold, and hence the name Reykjavik—a major city in Iceland. The second reason is due to my experience moving from Detroit, Michigan to Manhattan. When I finished my MBA, I moved to New York in late 2008—which of course was during the financial crash of 2008. Reykjavik, the city, was one of the first mortgage default hotspots in the world. I figured to name my company after the city that started the contagion of over leveraged mortgage markets and one of the causes of the major volatility dynamics of our financial markets.
As for the Poseidon software, it is developed under Reykjavik—which is a financial research studio owned solely by me. The design ethos is to provide the financial industry with surfacing tools to produce analysis of econometrics and financial data. The intent is to also provide a predictive set of tools for quantitative trading and to allow traders to manage risk by understanding volatility graphically.
Future development of the Poseidon software will be using crash prediction utilizing log periodic fitting and the use of crash hazard rates. Dynamic hedging will also be incorporated into the software using standard hedging methods, as well as artificial intelligent methods. As for advanced research being done by Reykjavik, visualization in a virtual reality engine is being developed. Experiments are also being conducted to utilize pattern recognition from market telemetry. All of this future development will be in future production releases of Poseidon.
Three possible problem types can be visualized through topographic financial techniques, albeit this is not an exhaustive listing. We will look at econometric problems first. Econometric information can be very data intensive. We need a means to be able to data mine and visualize these sorts of econometric problems. One such three–dimensional dataset is unemployment, time, and gross domestic product. By having all three factors in one graph will allow for easier analysis to be accomplished. Another econometric problem is related to tax rates. By using a Laffer curve we can see how tax rates can affect actual tax revenue. But what if we wanted to understand tax rates and tax revenue over time? We can accomplish this by using topographic finance. A Laffer surface can be created, whereby the three dimensions are tax rate, time, and tax revenues. By using this sort of economic analysis, with respect to tax rates, we can determine an optimized tax policy.
The second type of problem that topographical finance can solve is visualization of financial information. In terms of fundamental analysis, financial ratios, balance sheets, and income statements can be visualized. For example, price-to-earnings ratio, revenue growth rates, and time can be inputted into a three–dimensional graph to help compare different companies to determine if an investor should invest into that company. Another example within the fundamental analysis domain is long–term debt, time, and earnings. As can be imagined, there are countless configurations to graph financial problems.
Our third example is technical or quantitative financial problems. We can utilize topographic finance by graphing price, time, and volatility; therefore allowing for an understanding of how volatility evolves through time and affects the price of an asset. Another good example is the volatility surface for an option contract. When making a volatility surface for options strike price, time-to-maturity, and volatility are used.
Again, topographic finance can graph many different types of problems and will most likely evolve into utilizing hypercubes, whereby multiple three–dimensional spaces are compared with each other to understand high dimensional dynamics. Many traders use lots of price charts with many indicators, which is utilizing hypercube faces to understand the dynamics of the market.
This is my video lecture.