ForecastOS Hivemind; Measuring Emergent Sources of Risk & Return Since 2020

Table of Contents:

1. ForecastOS Hivemind
2. Emergent Themes; Top Sources of Risk & Return Since 2020
3. Closing Thoughts

Now, more than ever, the stock market is driven by emergent themes:

• The rise of generative AI
• Rapidly evolving inflation environments
• Wars, both trade and actual
• Rapidly shifting political agendas

A traditional, structural risk model can't tell you how exposed your portfolio is to these new-school sources of risk and return. Even sub-industry-neutral portfolios remain heavily exposed.

You, a smart, institutional investor, know to actively and intentionally manage your portfolio's exposures. The problem is that the risk and performance attribution tools you're using can't identify and manage these increasingly frequent, emergent themes that drive performance and volatility.

Hivemind, ForecastOS’s new exposure functionality, was built precisely for that blind spot.

For institutional investors, this means you can:

• Explore, pinpoint, and quantify novel risks and opportunities with precision
• Seamlessly incorporate emerging trend exposures into your risk monitoring, attribution, or alpha-signal pipelines
• Move faster than the markets; proactively identifying blind spots before they become fixations

Let's explore how Hivemind both surfaces and creates exposures for point-in-time emergent trends next!

Under the hood, Hivemind is a generative-AI engine that turns unstructured data firehoses (podcasts, filings, etc.) into clean, point-in-time factors. Instead of forcing your book into a static factor coffin, Hivemind lets you explore emergent point-in-time trends...

quantify trend movement...

turn emergent trends into exposures...

and even define new exposures for your equity universe...

Want to know which of your holdings are truly tariff-sensitive, or how exposed you are to rising inflation?

Describe the concept once and Hivemind scores every name in your universe, as frequently as every day. These bespoke exposures flow straight into your risk, performance-attribution, or signal pipelines in minutes, not months.

Using Hivemind, let's surface and examine the most prominent, market relevant trends since 2020.

We can use Hivemind's trend aggregation tool to rank market relevant trends since 2020...

... and it looks like the most prominent market-relevant trends since 2020 were:

1. COVID-19 pandemic
2. Conflict: Russia-Ukraine
3. U.S. elections and associated policy
4. Generative artificial intelligence
5. Inflation and interest rates
6. Conflict: Middle East
7. Cryptocurrency
8. Conflict: China-Taiwan
9. U.S. tariffs (from page 2)
10. Medicaid cuts (from page 2)

Let's explore each of them below, using Hivemind to measure discussion volume and associated exposure returns!

1. COVID-19 Pandemic

In early 2020, COVID-19 spread worldwide, leading the WHO to declare a global pandemic. The rollout of vaccines / mass vaccinations started in late 2020, marking a major turning point. By early 2023, restrictions were largely lifted, and the WHO declared the public health emergency over.

COVID-19 Pandemic Annotations

2. Conflict: Russia-Ukraine

Russia’s full-scale invasion of Ukraine in early 2022 sparked a devastating war that drew global attention and support for Ukraine. The conflict remains ongoing, marked by heavy casualties, economic disruption, and deepening geopolitical tensions.

Conflict: Russia-Ukraine Annotations

3. U.S. Elections & Associated Policy

The 2020 election and its aftermath highlighted deep political divisions, culminating in the Capitol attack and Trump’s second impeachment. Shortly thereafter, Republicans regained power in Congress during the 2022 midterms. In 2024, Trump won re-election and was inaugurated in January 2025.

Note: tariffs (trend #9) and Medicaid cuts (trend #10) are reviewed separately later in article as well.

U.S. Elections & Associated Policy Annotations

4. Generative Artificial Intelligence

Since 2020, Gen. AI has been the largest economically-driven investment theme. The public launch of ChatGPT in November 2022 made AI mainstream overnight, sparking widespread adoption. Other companies quickly followed suit. The technology has advanced rapidly alongside concerns from governments and other stakeholders regarding potential risks and societal impact.

Note: Google’s 2017 paper “Attention Is All You Need,” introduced the transformer architecture used by ChatGPT and other LLMs.

Generative Artificial Intelligence Annotations

5. Inflation & Interest Rates

The COVID-19 pandemic triggered aggressive fiscal and monetary policy, causing inflation to surge throughout 2021 and 2022. In early 2022, the Fed began hiking rates to combat inflation. Recently, as the US economy has begun to show signs of weakness, the Fed has signalled it's thinking about slashing rates.

Inflation & Interest Rates Annotations

6. Conflict: Middle East

Conflict in the Middle East escalated sharply after the Oct 7, 2023 Hamas attack on Israel. The conflict has since grown into a broader, multi-front confrontation involving Iran, the U.S., and various proxy forces.

Middle East Conflict Annotations

7. Cryptocurrency

Since 2020, cryptocurrency has surged in popularity. This growth has been accompanied by numerous scandals, such as high-profile rug pulls, the FTX collapse, and major exchange hacks. In response, governments worldwide have increasingly implemented regulations to enhance oversight, protect investors, and curb illicit activity.

Note: the above exposure return is (intuitively) correlated with BTC and S&P500 returns.

Cryptocurrency Annotations

8. Conflict: China-Taiwan

Over the past five years, Taiwan has faced mounting pressure from China through military drills and diplomatic isolation. The U.S. has shown consistent support through arms sales and high-profile visits, further straining cross-strait relations. These escalating tensions risk sparking conflict in a region vital to global trade, security, and (Taiwanese) semiconductor supply chains.

Note: a war has not broken out (yet) in this region. As such, the exposure return above is fairly flat (see y-axis), as expected.

China Taiwan Conflict Annotations

9. U.S. Tariffs

A key aspect of Donald Trump's political platform has been aggressive and widespread tariff use. These measures have targeted both allies and rivals, sparking retaliation and raising import costs to historic levels. A growing body of people doubt his resolve and follow through, leading to the rise of the acronym TACO (Trump Always Chickens Out).

U.S. Tariffs Annotations

10. Medicaid Cuts

Medicaid funding has changed over time, largely related to which political party is in power and (the end of) COVID-19 related initiatives.

Medicaid Cuts Annotations

In today’s fast-moving investment landscape, where generative AI, inflation fluctuations, geopolitical upheavals, and global trade shifts increasingly dictate market behaviour, static risk models fall short. Only tools rooted in perceived causality, not outdated correlations, can help institutional investors quickly and accurately surface and manage these dynamic exposures.

That’s exactly what ForecastOS Hivemind delivers. By converting unstructured data - podcasts, filings, and other live feeds - into clean, point‑in‑time factor signals, Hivemind equips you with real-time insights for emergent themes.

Want to see how tariff risk is evolving across your portfolio today? Or how exposed you are to sharp inflation shifts? Hivemind lets you generate and score exposures across your universe in minutes - not months - even for brand‑new trends.

For institutional investors, this means you can:

• Discover and quantify novel risks and opportunities with precision
• Seamlessly incorporate emerging trend exposures into your risk monitoring, attribution, or alpha pipelines
• Move faster than the market

ForecastOS Hivemind isn’t just a tool - it’s your edge. In an era where the pace and complexity of market forces are escalating, Hivemind empowers you not just to respond, but to anticipate and act with conviction.

Let’s partner to help you discover, measure, and manage emergent sources of alpha and risk!

To learn more about Hivemind, or to schedule a demo, email us at hi@ forecastos.com