Individual investors have long been searching for a “crystal ball” that can give them an edge in the markets by helping them select the right stock at the right time.
Asahi Glass Co. claims to have developed such a system — the RAIT, or return analytic indication tool, which the glassmaker claims scientifically forecasts the movement of stock prices.
Asahi Glass said it developed the system by utilizing its knowhow in glass-melting technology. At first glance, stock-price prediction might seem far removed from the business of making glass. But there is common ground in crunching numbers, and in that area, glassmakers are no slouches.
To turn out quality products, glass manufacturers have to make pressure, temperature and other measurements for glass-melting furnaces by using hundreds of sensors, then collect and analyze this vast amount of constantly changing data to simulate the flow of melting glass within the furnaces.
Asahi Glass says it applied these techniques and technology to develop its stock-price forecasting system.
The system essentially breaks down into two parts.
It first creates a theoretical waveform of stock price fluctuations by analyzing a stock’s actual price movement, and then adjusts that theoretical waveform by referring to a database of deviations of theoretical waveforms from the waveforms of the stock’s actual closing prices over the previous decade.
The company claims the system can forecast upward and downward movements as well as the turning points of price changes of the nearly 1,500 shares listed on the first section of the Tokyo Stock Exchange.
Company officials admit, however, that stock price movements projected by the system “are not always 100 percent accurate.”
“An unforeseen incident or accident can cause wild fluctuations in stock prices,” they said, adding, “The system has been well received by investors who have used it on a trial basis.”
Asahi Glass started offering the system this month via the Internet to individual investors at a monthly fee of 3,000 yen.
It hopes to develop a similar system for currency exchange transactions, aiming to achieve annual sales of 500 million yen in its financial services business.
The glassmaker is following in the footsteps of steelmakers, which have also broken into the financial sector.
Steelmakers have already provided various systems to financial institutions by capitalizing on their own experience in advanced IT capabilities. Steelmakers have cultivated this knowledge through their round-the-clock operation of blast furnaces and controlling the temperature of rolling mills by computer.
Steelmakers have many technologies that can be applied to financial service systems because the numerical expressions used for the production of financial derivatives can be similar to those used for steel production.
NS Solutions Corp., an affiliate of Nippon Steel Corp., has built a reputation for its risk-management systems.
Nippon Steel Corp. branched into the development of financial systems in the late 1990s.
Keio University Professor Takahiko Tanahashi, who collaborated in the development of RAIT, said technologies to manufacture products by controlling the flow of materials, such as those used by steelmakers and glassmakers, are easily applicable to the development of financial service systems.
“If university laboratories properly act as a go-between, the application of manufacturers’ technologies to financial services will just keep making further progress,” he said.
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