Comparing Apples to Oranges

Use case: Cardinal risk comparison

One particularly compelling use case is risk analysis, where NL Analytics enables cardinal comparisons of different risks over time – providing unprecedented insights that were previously difficult, if not impossible. Consider the above figure that is based on data generated with our platform. The chart tracks several key risks from 2018 to early 2022, including COVID-19, supply chain issues, inflation, and Russia. We immediately observe, for example, that COVID-19 risk dominates from early 2020, and that supply chain risk emerges as a significant concern in 2021.

The key advantage, however, of this approach is the ability to compare the magnitudes of different risks. For instance, in late 2021, we can see that supply chain risk was about twice as much as inflation risk, while itself being only about half as prominent as COVID-19 risk. This cardinal comparison of different risks is uniquely powerful. Traditionally, comparing the magnitude of different risks often relies on qualitative assessments such as surveys or disparate quantitative measures that aren't directly comparable. By contrast, our approach allows for direct, quantitative comparison of different risks.

Pioneering risk analyses: Beyond traditional metrics

NL Analytics' cardinal risk comparison opens doors to groundbreaking analyses that were previously out of reach. Here are three innovative applications that can provide you with a competitive edge:

1. Quantify the executive mindset. Transform qualitative managerial concerns into data-driven tailored recommendations. The cardinal comparison of risks faced by executives offers a concrete and nuanced understanding of the business landscape that complements traditional indicators like fear indices or CDS spreads.
   • Example: When advising on market entry strategies, our platform allows you to quantify risk ratios - for example, comparing supply chain to regulatory risks in different markets. This data enables targeted recommendations: you might suggest Market A to clients strong in supply chain management but weaker in regulatory expertise. Ultimately, these nuanced insights help tailor advice to each client's unique capabilities, optimizing high-stakes investment decisions
   • Example: Policy makers and international organizations assessing global risks might determine that discussions of cybersecurity risks are three times more prevalent than those of infectious disease risks across G20 countries. More broadly, it could enable organizations to more precisely quantify and compare the perceived severity of different global risks, similar to what the World Economic Forum is doing in its annual Global Risks Report.
2. Spot risk pioneers and blind spots.  Identify companies that are either leading the pack in recognizing emerging risks or potentially overlooking critical threats. By comparing firm-level risk perceptions against industry or economy-wide trends, you can pinpoint investment opportunities or flag potential vulnerabilities in your portfolio.
3. Deconstruct macroeconomic risks. Trace the DNA of broader economic crises through individual corporate communications. For instance, track how mentions of chip shortages in earnings calls cascade from individual firms to industries and eventually signal a broader supply chain crisis. This bottom-up approach could, for example, help to anticipate macroeconomic shifts before they become apparent in traditional economic indicators.

From words to actionable insights

NL Analytics' platform is built on a key principle: every data point stems from specific semantic meaning in text. When a numeric indicator changes, users can access the relevant text excerpts, explaining the shift – something that is generally not possible with traditional indicators. Our interface allows seamless navigation between quantitative metrics describing aggregate variation and their underlying qualitative data, bridging statistical trends with real-world insights. This integration empowers users to not just observe changes, but to understand the narratives driving them.

Bridging academia and global financial institutions

NL Analytics emerged from peer reviewed research conducted by our founders at leading universities. Since our founding in 2022, we have rapidly gained the trust of major international institutions, central banks, and think tanks Our client roster includes the European Central Bank, International Monetary Fund, Bank of England, European Bank for Reconstruction and Development, and the Brookings Institution. These organizations use our tool for research and policy analysis, validating its capability to provide robust, actionable insights at the highest levels of economic decision-making. The same powerful analytics driving central bank policies are now available to inform your strategic decisions.

Schedule a demo

We invite you to explore how NL Analytics can enhance your analytical capabilities and provide you with a significant competitive advantage. By scheduling a demo, you will have the opportunity to:

• See the platform in action.
• Discuss integration with your existing workflows.
• Explore customization options to meet your specific needs
• Request a 2-week trial to experience how NL Analytics can help you.

In an era where understanding global risks is more crucial than ever, NL Analytics provides you with unprecedented insights and analytical power. We look forward to working with you.