# Open Source Fundamental Industry Classification

## TL;DR

This paper offers open source tools for constructing a fundamental industry classification and evaluates its effectiveness in short-term trading strategies using open source risk models.

## Contribution

It provides a comprehensive, open source implementation of industry classification based on public data and compares its performance in trading signal generation.

## Key findings

- The open source classification performs competitively in trading simulations.
- The source code is modular and easily adaptable for different data sources.
- The approach facilitates transparent and reproducible industry classification analysis.

## Abstract

We provide complete source code for building a fundamental industry classification based on publically available and freely downloadable data. We compare various fundamental industry classifications by running a horserace of short-horizon trading signals (alphas) utilizing open source heterotic risk models (https://ssrn.com/abstract=2600798) built using such industry classifications. Our source code includes various stand-alone and portable modules, e.g., for downloading/parsing web data, etc.

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Source: https://tomesphere.com/paper/1706.04210