Earnings calls play a pivotal role in shaping investor perceptions. The quality of communication between executives and analysts can significantly influence company performance. On-topic and proactive exeutives, who deliver proactive presentations, anticipate market queries, and provide clear, on-topic answers to analysts’ questions—consistently outperform their peers. Conversely, off-topic and reactive executives, who fail to address analysts’ key inquiries during presentations, and provide off-topic responses—significantly underperform.
Executives' ability to anticipate investor concerns and maintain a focused dialogue fosters confidence and strategic communication. In contrast, failing to provide clarity when analysts seek additional information can lead to misalignment and breakdowns in transparency. A long (short) portfolio of on-topic and proactive (off-topic and reactive) generates +515bps of annualized alpha.
This QuickStart with it's Notebook serves as the blueprint for the research detailed in Quantitative Research & Solutions’ recent publication, "Questioninig the Answers: LLM's enter the Boardroom." It analyse executive on-topicness and proactiveness using the analysts questions, executives answers and LLM answers. This research harness alpha using LLM tools, including vector embeddings, vector cosine similarity, and the LLM quesiton answering.
Through this quickstart, you will learn how to use Snowflake Notebooks and Snowflake Cortex LLM functions on earnings call using the Machine Readable Transcripts dataset from S&P Global Market Intelligence.
For prerequisites, environment setup, step-by-step guide and instructions, please refer to the QuickStart Guide.