I recently posted on the topic of Information Arbitrage Opportunities related to some blogosphere chatter on the topic. As a follow-up to that post, I came across this Slashdot article talking about an approach of "topic modeling" that is being implemented by some computer scientists at University of California, Irvine.
A press release on the breakthrough is here and a ZDNet article about topic modeling is here.
Using this topic modeling approach may be an effective first step in successfully implementing Information Arbitrage to power an investment strategy. The topic modeling would need to monitor for, identify and alert interesting topics in the investment arena. Those alerts would need to be tied to a financial analysis and underlying database, and followed up with a trading strategy for the opportunity based on the information and the financial analysis.
Used in the right way, it seems that topic modeling could help indentify in a timely manner interesting opportunities for effective investment strategies.
– brian
