Thank you Derek and Miriam.
I implemented a simple sentiment analysis into the alpha. However, more research regarding the keywords needs to be done. Miriam, right now the analysis is only scanning articles pertaining to the specific stocks. Soon it will also scan articles about military ventures. Hopefully, with these upcoming changes, we can increase the alpha and lower the variance of this strategy.
The alpha still has some flaws. However, I will explain some of the changes made:
1st: Insight direction is determined by total points
2nd: 3 points are added if majority senate is Democratic and -3 points for Republican.
3rd: Points are added or removed by sentiment analysis
4th: If total points are greater than 10, Long. If total points are less than -1, short.
All values were determined based on the distribution of total points logged over a period of time. Further improvements can be made by the better justification of these values.
Working on this side project has been a lot of fun.