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Products / Epsilon

Epsilon —
Idiosyncratic Risk Engine

Detects, quantifies, and predicts issuer-level risks—then proposes hedges, sizing, or rotation with evidence you can audit.

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What Epsilon Does

From detection to action—a complete idiosyncratic risk workflow powered by AI agents.

Autonomous Agents

AI agents continuously scan news, filings, alternative data, and price anomalies to surface emerging issuer-level risks before they materialize.

Idio Risk Scoring

Proprietary scoring model isolates idiosyncratic risk from systematic factors, giving you a clean signal on issuer-specific vulnerabilities.

Scenario Generation

Automatically generates plausible stress scenarios based on detected risks, quantifying potential P&L impact across your positions.

Action Proposals

Recommends hedges, position sizing adjustments, or rotation strategies with full transparency on assumptions and expected outcomes.

Why Epsilon Is Different

Traditional risk models focus on systematic factors. Epsilon specializes in what they miss—the issuer-specific risks that drive single-name blowups.

Weak Signal Detection

Captures subtle early indicators that traditional risk models miss—supply chain disruptions, management changes, regulatory shifts, and sentiment divergences.

Fully Explainable

Every alert and recommendation comes with a complete audit trail: source data, model reasoning, confidence intervals, and alternative interpretations.

Overlay Mode

Runs alongside your existing risk infrastructure without disruption. Enhances rather than replaces your current processes and systems.

Action Proposal Interface

Outputs You'll Use Daily

Actionable deliverables designed for portfolio managers and risk officers.

Watchlists & Alerts

Dynamic watchlists ranked by risk severity with configurable alert thresholds. Real-time notifications via dashboard, email, or API.

Action Proposals

Structured trade recommendations with sizing, timing, and hedge ratios. Each proposal includes expected risk reduction and implementation costs.

Post-Action Attribution

Track the effectiveness of actions taken. Measure actual vs. predicted risk reduction and refine models based on outcomes.

Use Cases

How leading investors apply Epsilon to protect and optimize their portfolios.

Single-Name De-Risking

Identify deteriorating credit or equity positions before market consensus. Reduce exposure with precision timing and optimal execution strategies.

Supply-Chain Contagion

Map hidden dependencies across your portfolio. Detect when supplier distress, logistics disruptions, or input cost shocks threaten multiple holdings.

Tactical Hedging

Generate event-driven hedge recommendations for earnings, regulatory decisions, or geopolitical developments affecting specific issuers.

Integration & Workflow

Epsilon integrates seamlessly with your existing infrastructure. Deploy as an overlay to your current risk systems or as a standalone solution.

Flexible Deployment

Cloud-hosted SaaS or on-premise installation for sensitive environments.

Enterprise Security

ISO 27001 standard. Data encryption in transit and at rest. Role-based access controls.

8 Steps to Integration

1
Environment Assessment
Audit existing systems
2
Data Mapping
Connect data sources
3
Model Configuration
Customize risk models
4
API Integration
Link to your platforms
5
Workflow Design
Define alert triggers
6
User Training
Onboard your team
7
Testing & Validation
Parallel run period
8
Go Live
Full deployment

Frequently Asked Questions

Common questions about Epsilon's capabilities and implementation.

Epsilon employs a multi-layer validation process: signals must pass statistical significance tests, corroborate across independent data sources, and demonstrate causal relevance to the issuer. Our ensemble approach combines multiple detection methods, only surfacing alerts when confidence exceeds calibrated thresholds. Clients can tune sensitivity based on their risk tolerance and capacity to act.
Every Epsilon output includes a complete audit trail. Risk scores decompose into contributing factors with individual weights and confidence intervals. Action proposals show the full reasoning chain: detected risk → scenario impact → proposed action → expected outcome. All source data is traceable, and you can drill down from summary scores to raw inputs.
Epsilon maintains comprehensive audit logs of all alerts, proposals, and actions taken. Role-based access controls ensure appropriate oversight. Pre-trade compliance checks can be integrated into the proposal workflow. All model versions are archived with full lineage, supporting regulatory inquiries and internal model risk management requirements.
Epsilon offers pre-built connectors for major order management and execution systems including Aladdin, Charles River, and Bloomberg EMSX. Action proposals can flow directly into your trading workflow as staged orders. For custom systems, our REST API and FIX connectivity enable seamless integration with any OMS/EMS infrastructure.

Ready to Uncover Hidden Risks?

See how Epsilon can enhance your risk management with a personalized demonstration.

Schedule a Demo