Event Impact Scoring
Each event ingested by PulseGrid™ is evaluated for its potential impact on every tracked instrument. This process involves several steps:
Event Attributes
| Attribute | Description |
|---|---|
| Severity (1-10) | How significant the event is in absolute terms. A severity-10 event (e.g., major war outbreak) affects markets broadly; a severity-2 event (e.g., minor regulatory update) has limited scope. |
| Category | Classification: geopolitical, economic, earnings, regulatory, natural_disaster, technological, social, environmental |
| Affected Symbols | Which instruments are directly or indirectly affected |
| Direction | Whether the event is expected to be positive, negative, or neutral for each affected instrument |
Impact Calculation
The event impact on a specific instrument is computed as:
Impact = Severity x Relevance x Direction x Decay
Where:
- Relevance (0-1): How directly the event relates to the instrument (direct mention = 1.0, sector peer = 0.5, tangential = 0.1)
- Direction (-1 to +1): Expected directional effect
- Decay: Time-based decay factor. Recent events carry more weight; events older than 30 days have minimal influence.
Why Events Sometimes Show Zero Impact
An event may show zero impact on an instrument if:
1. The instrument has no exposure to the event's category or geography
2. The event is too old (decay has reduced its weight to near zero)
3. Conflicting events cancel each other out