Data & Method
Arium's Trade Analysis Tool is predicated on two observations:
- The economy as a whole is underpinned by a network of trade. Analysing the flow of trade between industries can help you envision the potential impact of those relationships on an industry's prospects and on those companies operating in those industries.
- Through their subsidiaries, companies often participate in a wide range of activities - some far removed from the industry of the holding company itself. Consider well-known brands like Tesco or Marks & Spencer. The parent companies might be considered supermarkets or clothing retailers respectively, but each company also has subsidiaries that issue credit cards, provide insurance, and trade in real estate. Failing to consider the full range of subsidiaries' activities eliminates a great deal of information about the companies and the potential diversity of any portfolio in which they are present.
To capture the activities of companies, and to map the relationships between the industries of those companies, Arium combines reliable, authoritative government data with your portfolio data:
- Company data from your portfolio which can include subsidiaries, turnover, country of operation, and industry.
- Inter-industry trading data derived from a US government database detailing the trade links and value of trade between industries. These data allow us to map the relationships between industries and the relative strength of the trade.
The nodes themselves - Industries - are the only connection between the company data populating the nodes, and the trading data (relative amount of trade between industries), forming the links between the nodes.
To use the Trade Analysis Tool, users can select a company, set of companies, or industry of interest to them. The Tool will illustrate the connections between the industries and companies involved as a network - a diagram in which the industries are points (or "nodes") connected by lines indicating trading relationships.
A simple switch can colour the nodes based on industry or sector to allow different levels of analysis. By looking for clusters of highly-linked industries, the activities of a particular company, and so on, the map can be used to uncover previously unseen risks and opportunities.
We welcome enquiries about our products at enquiries@arium.co.uk.