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Beyond static metrics: uncover hidden risks and maximize returns with advanced analytics

Structured finance thrives on data-driven decisions. Spotting trends requires dynamic, easily configurable metrics that can summarize vast datasets and streamline operations. At Cardo AI, we understand these challenges. That’s why we’ve pioneered advancements in transition matrix and vintage default analysis. These powerful metrics give you the insights you need to make smart decisions, fast. 

What’s in it for you?

Predict and manage future loan performance: Imagine you have different loan pools performing well today. Predicting which pools might have trouble down the line allows you to proactively manage risk and avoid potential losses.

Optimize your portfolio for maximum return: By identifying high and low-performing loan groups, you can strategically allocate resources. This targeted approach helps maximize returns.

Make confident investment decisions based on clear data: With over 30 filter options, you can create tailored metrics that align precisely with your business needs, ensuring that your measurements are both relevant and impactful.
Free up time and resources for strategic growth: Basic analysis can be time-consuming and prone to errors. Generating reports rapidly gives you a comprehensive picture with less effort and helps keep both internal and external stakeholders continuously informed and engaged.

Why does this matter?

Structure finance relies on accurate metrics for everything from loan approvals to portfolio management and risk assessment. But traditional tools can struggle. Charts and basic metrics often miss the connections between different factors, leading to misinterpretations and wasted time. By integrating an advanced transition matrix and vintage default analysis, Cardo AI equips market participants with robust tools to navigate the complexities of structured finance. Our solutions let you track performance trends over time, and identify optimal performing groups based on origination dates, pool additions, and transaction dates.

How does it work?

Our advanced analytics tools, the Transition/Behavioral Matrix and Vintage Default Analysis, offer a deep dive into the dynamics of your financial assets. Here’s a closer look at how each tool functions:

Transition/Behavioral matrix:

  • Unveil asset performance dynamics over time: This feature offers deep visibility into how your assets perform over time. By analyzing how portions of your portfolio transition between states (performing, delinquent, default), you can proactively anticipate risk exposure and adjust strategies.
  • Actionable insights from historical data: Leveraging historical data, this feature provides insights into asset behavior, enabling informed decision-making and risk mitigation.
  • Flexible transition matrix: The powerful transition matrix empowers data-driven decisions. Customize it to the most relevant dimension (e.g., current balance, number of assets) and transition type (e.g., performance status, amortization status). (Table 1)
  • Behavioral matrix at a glance: For a quick summary, the behavioral matrix option shows which parts of your portfolio have improved, remained stable, or worsened. (Table 2)

Transition Matrix platform screenshot
Image 1: Transition Matric functionality preview

Image 2: Behavioral Matrix functionality preview

Vintage Default Analysis:

This tool goes beyond static assessments to capture the evolving nature of credit risk.

Imagine your loan portfolio as a forest, with different trees planted at different times (origination dates). Vintage Default Analysis is like taking time-lapse photos of the forest. By grouping loans based on when they were originated (planted), when they were added to a specific group (pool addition date), and when they were bought or sold (transaction date), we can see how the risk of default changes over time for each group (Table 3). This lets you see:

  • Which clusters of loans are performing better or worse? 
  • How the risk of default changes for each cluster over time? 

Vintage Default Analysis gives you a much clearer picture of risk across your portfolio, with up to 30 different ways to slice and dice the data to find the information you need.

Vintage Default Analysis platform screen
Table 3

Use Case:

Our client is a leading asset manager, struggling with a large and diverse portfolio of asset-backed securities. Their traditional methods for risk assessment were time-consuming and offered limited insights into asset transitions and historical performance. This made it difficult to assess risk and optimize portfolio performance.


Solution: They implemented Cardo AI’s advanced analytics solution, including Vintage Default Analysis. This powerful tool provided a deeper understanding of asset behavior by analyzing historical data and grouping assets based on origination dates, pool additions, and transaction dates.

Results:

  • Reduced time spent on metrics: Cardo AI streamlined our Client’s process of updating and creating performance metrics.
  • Deeper portfolio analysis: With Cardo AI’s flexible filters, our Client could analyze their portfolio from multiple angles, uncovering hidden risk patterns and performance dynamics.
  • Improved risk-adjusted returns: By proactively identifying potential issues and optimizing asset allocation, our Client achieved higher risk-adjusted returns for their portfolio.
  • Enhanced operational efficiency: Streamlined workflows and reduced manual labor led to significant operational efficiency gains.


Ready to enhance your analytical capabilities?
Discover how Cardo AI can transform your approach to data analytics. Request a demo here and see the benefits firsthand.