Product Overview of Numerix
Numerix is a cutting-edge software solution designed to empower financial professionals with advanced analytics and comprehensive risk management tools, particularly for the valuation and risk management of complex derivatives and structured products.
What Numerix Does
Numerix offers a “one-stop” cross-asset pricing platform that caters to the needs of sales, traders, quants, and risk managers. It enables users to structure, price, and manage a wide range of financial instruments, including over-the-counter (OTC) derivatives, fixed income securities, structured products, and variable annuity products across all asset classes.
Key Features and Functionality
Advanced Analytics and Pricing Models
Numerix provides the industry’s most comprehensive derivatives pricing and risk management analytics library. It includes a wide array of pricing models and an adaptable architecture for defining bespoke deals, allowing users to handle even the most complex exotic derivatives with ease.
Risk Management
- Risk Scenario Framework: Numerix’s Risk Scenario Framework automates the modeling and pricing of portfolios, enabling stress testing and the calculation of central difference Greek sensitivities such as Interest Rate DV01, equity delta, and vega. This framework integrates with a financial institution’s book of records to conduct scenario-based analyses and projections.
- Market, Credit, Liquidity, and Counterparty Risk Management: Numerix offers sophisticated tools for managing various types of risk, including market risk, credit risk, liquidity risk, and counterparty risk. It also provides features like Value At Risk (VaR), Expected Shortfall, and real-time risk monitoring.
Scenario Analysis and Stress Testing
The platform enhances stress testing capabilities, allowing for large-scale scenario shocks and the estimation of portfolio value changes, gains, and losses across various scenarios. This is crucial for financial institutions to meet regulatory requirements and manage risk effectively.
Flexible Deployment and Integration
- CrossAsset XL: Numerix CrossAsset XL integrates seamlessly with Microsoft Excel, providing traders and structurers with the flexibility to structure, price, and manage complex derivatives and structured products within a familiar environment. It facilitates pre-trade price discovery, stress-testing, and monitoring of trading strategies directly in Excel.
- Rapid Integration: Numerix can be rapidly integrated into existing systems, reusing financial objects like yield curves and calendars to ensure consistency between host analytics and components of exotic prices. The platform is implemented in platform-independent, thread-safe, ISO-standard C .
Portfolio Management and Reporting
Numerix offers a scalable Front Office structuring, trade capture, and portfolio management system. It supports the management of portfolios across fixed income, credit, equity, and foreign exchange exotic derivatives and vanilla products. The system provides a full selection of management and risk reports to cover risk management needs.
Customization and Transparency
- Deal Definition Language: Numerix features a proprietary deal definition scripting language that allows users to capture most deal types in the market without hard coding or using black box systems. This language, along with hundreds of customizable trade templates, dramatically reduces the time-to-market for creating new products.
- Transparency: The platform provides maximum flexibility and openness, ensuring that users understand exactly how calculations are generated. This transparency is vital for trust in the calculations and insights provided.
Regulatory Compliance
Numerix ensures compliance with regulatory requirements through its advanced risk management and reporting tools. It supports regulatory compliance, hedge accounting, and collateral management, making it a comprehensive solution for financial institutions.
In summary, Numerix is a powerful and flexible platform that combines advanced quantitative analytics, robust risk management tools, and seamless integration capabilities to help financial professionals make precise valuations and strategic decisions in the dynamic capital markets.