The StarMine Combined Credit Risk Model (CCR) combines information from the StarMine Structural, SmartRatios, and Text Mining Credit Risk Models into one final estimate of corporate credit risk. By incorporating information from multiple independent data sources – from the equity market, from analyst estimates and financials, and from analysis of the language in important textual documents – and placing the most emphasis on the inputs that are most effective for a given company, StarMine CCR creates powerful default predictions and assessments of credit risk that are more accurate than using any one data source alone.
The CCR model uses a logistic regression framework. The weights partitioned to the Text Mining model, and the other two models are also conditioned on the volume of text on a given company, such that the weight on the Text Mining model increases with increasing text volume. This model calculates the probability that a company could default within 12 months.