Unlock Investment Edge with Strategic Role Clustering

How RedGraphs maps the economic network to power alpha generation

In a market crowded with sector labels and style boxes, investors are increasingly looking for new sources of insight—ones that cut through traditional classifications and surface how companies actually function in the economy.

At RedGraphs, we believe that understanding a company’s strategic role in the network—who it influences, who depends on it, and how that changes over time—is a key driver of differentiated performance.

That’s why we built Strategic Role Clustering.

What Is Strategic Role Clustering?

Strategic Role Clustering groups companies based on their position in the global business network, as measured by real-world customer–supplier relationships and money flows.

Instead of assigning companies to static sectors, we cluster them according to their influence, connectivity, and evolving role in the economic system.

• Market Hubs: Dominant firms with high upstream and downstream exposure
• Key Connectors: Companies linking disparate parts of the supply chain
• Peripheral Specialists: Niche players with focused dependencies

Why It Matters to Investors

Strategic Role Clustering isn’t just a new classification—it’s a new lens on market structure and positioning.

For Quants

• Use clusters as a signal generator
• Go long clusters with strong performance trend and high influence index
• Apply cluster metrics in multi-factor models or screens

For Fundamental Analysts

• Contextualize valuation and business model positioning
• Compare network role vs. market price
• Model exposure to strategically critical suppliers or customers

The Core Metrics Behind Strategic Role Clustering

We power our clustering with network-derived metrics calculated across 20 years of quarterly data:

Composite Role Score

A standardized score that reflects a company’s total influence in the network—blending inbound, outbound, supplier, and customer connectivity.

A high score = central to the economy. A low score = specialized or peripheral.

Performance Trend

The directional change in a company’s role score over time, based on regression over historical snapshots.

Positive = gaining influence → emerging leader
Negative = declining importance → potential headwind

Influence Index (Cluster-Level)

A normalized score (0–100) representing the average role strength of companies in a cluster.

High index = dominant cluster. Useful for identifying core vs. peripheral themes.

Stability Score (Cluster-Level)

Measures consistency within a cluster by comparing composite role score variability to its mean.

High stability = reliable patterns → suitable for low-volatility strategies
Low stability = divergent behavior → high-alpha/high-risk potential

Use Case: From Network Insight to Alpha Strategy

Here’s how a RedGraphs customer might build a strategy using Strategic Role Clustering:

1. Screen clusters with high influence index and rising performance trend
2. Filter for stocks with valuation mismatches
3. Track role evolution over time to anticipate shifts
4. Construct a thematic portfolio based on network behavior

The RedGraphs Advantage

Unlike traditional providers, RedGraphs doesn't rely on static classifications. Our clustering adapts to:

• Evolving company behavior
• New disclosures & filings
• Shifting global market structure

Strategic Role Clustering is fully integrated into the RedGraphs platform—available via UI, API, or export.

Ready to Rewire Your Market View?

If you're looking for a new edge in stock selection, portfolio construction, or risk analysis, Strategic Role Clustering offers a unique lens.

Book a demo to see it in action
Already a customer? Reach out to your account manager to explore how you can start leveraging Strategic Role Clusters in your investment workflow.