The Arch Cortex Engine
Our proprietary ML optimization framework. It powers the analytics that reveal portfolio risk, and the optimization that rebuilds around it.
From data to risk clarity to optimized portfolios.
Four steps that turn raw market data into portfolios built around the risk you choose, and keep them there as conditions change.
Factor Discovery
Machine learning models continuously analyze market data to identify the factors (value, momentum, volatility, quality) that are actually driving returns right now.
Risk Analysis
Each factor is assessed for risk contribution, correlation structure, and forward-looking relevance. That turns raw signals into a risk map of any portfolio.
Optimization
The optimizer constructs portfolios around your target objectives while respecting risk budgets, correlation limits, and concentration constraints.
Dynamic Rebalancing
As conditions shift, all three steps run again. Weights move with the market rather than reverting to a target set at inception.
What the engine is solving for.
Most portfolios are built to a target return, or screened for a target yield, and volatility is whatever it turns out to be. The Performance Ratio inverts that. It measures income and price appreciation against the portfolio volatility required to produce them.
Optimizing that ratio is what makes the engine’s answer change when the market changes. The same yield sourced from less volatility is a better portfolio, and the holdings that deliver it are not the same ones every year.
Income and price appreciation
Volatility of the whole portfolio
Conceptual illustration of the objective function. Not a performance measure, a risk-adjusted return statistic, or a projection of results.
Diversification by count is not diversification by risk.
Eighty holdings that all move together is one position wearing eighty names. The optimizer considers the full correlation structure across every holding, so the risk that simple diversification misses is priced in before the portfolio is built.
Conceptual illustration of risk-space distribution. Does not represent any index, account, or product.
Portfolios built on understanding, not assumptions.
Risk Transparency
Every holding decomposed into the factors driving its behavior. No hidden exposures, no surprises.
Adaptive Optimization
As market conditions shift, the engine rebalances, adjusting exposures to hold your target risk profile.
Correlation-Aware Construction
The optimizer considers the full correlation structure across all holdings, reducing concentrated risk that simple diversification misses.
The engine runs live in the Arch ACE Core Absolute Income Index (VOIVWI) and the Arch ACE Global Absolute Income Index (SGAINC).
See the indicesSee what ACE reveals about your portfolio.
Get in touch for a portfolio risk analysis, or to learn more about licensing the engine.
Disclaimer
Copyright © 2026 by Arch Indices Corporation. All rights reserved. Arch Analytics and Arch Indices are trademarks of Arch Indices Corporation.
The content contained herein does not constitute an offer of investment services. All information provided is impersonal and not tailored to the needs of any person, entity or group of persons unless specifically licensed to do so. Information, indices, portfolios, and analytics provided by Arch Indices is solely for informational purposes.
An index or model portfolio is a hypothetical basket and cannot be invested in directly. Please consult your investment advisor for investment products that track indices or model portfolios.