RESEARCH SERIES · K=5 · 9-FEATURE
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Kroniq Research Series · Regime Detection API

The Intelligence
of Market Timing

Cross-asset Hidden Markov Model regime detection using credit spreads, volatility, and multi-asset signals. Real-time regime classification for institutional systematic strategies.

LIVE REGIME SIGNAL · api.kroniq.finance
REGIME
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CONFIDENCE
Posterior prob.
ALLOCATION
SPY exposure
Walk-Forward Sharpe
vs buy-hold 0.859
Walk-forward OOS
Max Drawdown
vs buy-hold -33.72%
OOS 2021–2024
COVID Early Warning
141 days
Before SPY peak, Feb 2020
Credit spread signal
OOS Period
1,005 days
2021–2024, 16 retrains
Walk-forward validated
Architecture

Three-engine regime detection framework

Built for institutional systematic funds that need regime-aware risk management unavailable in existing commercial products.

ENGINE 01
Regime Radar API
Real-time classification using 9-feature cross-asset Gaussian HMM. K=5 states confirmed via rigorous BIC sweep K=3–9 with stability validation. Returns regime, confidence posterior, and allocation weights per request.
ENGINE 02
Strategy Router
Maps regime state to asset allocation across SPY, TLT, GLD, and Cash. Five regimes × four asset classes with transaction cost modeling and confidence gating. 2bps per rebalance assumption.
ENGINE 03
Explainability API
Plain-English regulatory audit trail per classification. Designed for institutional compliance requirements. Dynamic feature attribution in development.
SIGNAL 01
Credit Spread Integration
ICE BofA US High Yield OAS (FRED: BAMLH0A0HYM2) as leading indicator. Extended COVID early warning from 23 days (equity only) to 141 days — credit markets price deterioration before equity reacts.
SIGNAL 02
Cross-Asset Features
Nine features: SPY returns + volatility, VIX level + change, TLT returns, GLD returns, SPY-TLT rolling correlation, credit spread level + change. Full covariance Gaussian HMM.
VALIDATED
Walk-Forward OOS
16 quarterly retrains over 2021–2024. Expanding window with StandardScaler refit at each step — no lookahead bias at any stage. State labels reassigned using fixed economic rules per retrain to prevent label drift.
API Response

Structured regime signal

Single endpoint returns current regime, confidence posterior, recommended allocation, and full state probabilities.

GET api.kroniq.finance/regime 200 OK
{
  "regime": "Macro",
  "confidence": 0.9999,
  "allocation": 0.30,
  "signal_driver_hint": "credit_spread OAS",
  "as_of": "—",
  "model_train_end": "2020-12-31",
  "mode": "live"
}
Regime Taxonomy

Five production states

States confirmed via BIC selection across K=3–9. K=6–8 rejected — micro-states under 25 days insufficient for reliable live routing.

LOW-VOL
VIX < 15, tight credit, calm
100% SPY
BULL
Highest return state
100% SPY
NEUTRAL
Transitional, residual
70% SPY
MACRO
Chronic stress, VIX > 18
30% SPY
CRISIS
VIX > 30, OAS > 6.5%
0% SPY
API Access

Request institutional access

Kroniq is currently in early access for systematic funds and quantitative research teams. Working paper on SSRN — methodology, walk-forward validation, and full results.

Methodology paper · API documentation · Demo key on approval