By Keel Research Team
Updated October 15, 2026Factor research
Alpha research for crypto factors
Alpha research tests whether a signal, such as momentum or funding, actually predicts which coins will do better, before you build a strategy on it. The usual measure is the information coefficient: the correlation between today's signal and the next period's returns across coins. Keel is a strategy builder and backtester for Hyperliquid perpetuals; factor research tools are coming soon, and today you test a factor by backtesting a strategy that ranks coins on it.
Coming soon
Factor research tools
Factor research tools, such as information coefficient and decay reports, are coming to Keel. They are not in the product yet.
In Keel today
- Backtest over the dates you choose, with fees, slippage and funding
- Change a setting and re-run; every version and backtest is kept
- Paper trade on live Hyperliquid prices with no money at risk
What it is
Test the signal before the strategy
A factor is a score you give every coin each day: its recent return, its funding rate, its change in open interest. Alpha research asks whether coins with a high score go on to beat coins with a low score.
The information coefficient, or IC, answers that with one number per day: the rank correlation between the scores and the next period's returns. An average IC of a few hundredths is normal for a useful factor. What matters is that it stays positive across time and across coins.
Decay tells you how long the signal lasts. If the IC is strong one day ahead and gone five days ahead, the strategy has to trade often, and costs decide whether it pays. Quantile spreads, the return of the top group of coins minus the bottom group, show the same thing in returns you can picture.
Why it matters in crypto
Crypto has its own factors
Perpetual futures add signals that stocks don't have. Funding rates show who is paying to hold a position, open interest shows how crowded a trade is, and on Hyperliquid funding is paid every hour.
The cross-section is also thin and shifting. A few large coins dominate, and the rest change with listings and liquidity, so a factor that works on the top 20 coins can vanish on the top 100. Testing the signal on its own shows that before you commit to a strategy.
A real example
Two factors, one strategy
This library strategy ranks coins on recent momentum and on funding, then holds a balanced long and short book.
Sharpe
1.90
Total return
+124.2%
Worst drawdown
−16.6%
Trades
7,355
It shows what a factor idea looks like once it becomes a strategy that pays real costs. Momentum + Funding Strategy on Hyperliquid, Hyperliquid, Aug 2024 to Sep 2026, after trading fees, slippage and funding. Past results don't predict future ones.
See Momentum + Funding Strategy on Hyperliquid in the libraryIn Keel today
Test a factor as a strategy today
You can't run IC reports in Keel yet. You can backtest what the factor would earn.
Rank coins on a factor
Build a strategy that scores coins on momentum, funding or another signal, ranks them and sizes positions from the rank. Keel's blocks cover the data, the ranking and the sizing.
Real costs in every run
Every backtest charges trading fees and slippage and applies Hyperliquid's hourly funding to open positions, so a setting that trades a lot pays for it.
How the backtest worksCompare two versions of a factor
Ask a connected assistant to backtest two versions, for example momentum alone and momentum plus funding, and compare the runs side by side.
Connect your assistantRead the factor explainers
Our research pages explain IC, decay and half-life in more depth, with how to compute them yourself in a notebook.
Trading research on HyperliquidComing soon
Factor research tools
Factor research tools, such as information coefficient and decay reports, are coming to Keel. They are not in the product yet. Sign up free and we'll email you when it ships. Your account works today: build a strategy, backtest it and paper trade it while you wait.
FAQ
Common questions
What is alpha research?
Testing whether a signal predicts returns before you trade it. You score every asset, measure how well the scores line up with what happened next, and check that the relationship holds across time, assets and costs.
What is the information coefficient?
The correlation, usually by rank, between a factor's scores and the returns that follow, measured across coins at each date. Positive means high scores tended to beat low scores. It is averaged over time and checked for stability.
What is a good IC for a crypto factor?
Small numbers are normal. A steady average around 0.02 to 0.05 can support a strategy if it holds across time and survives costs. A very high IC on a short history is more often a mistake than an edge.
Does Keel calculate IC for my factors?
Not yet. Factor research tools, including IC and decay reports, are coming soon, and if you sign up we'll email you when they ship. Today you test a factor by backtesting a strategy that ranks coins on it.
Can I test funding rate as a factor?
Yes, as a strategy. Keel has Hyperliquid's funding history, so you can rank coins on funding and backtest the result with costs. The library's funding carry strategy is one example.
How realistic are Keel's backtests?
Every backtest charges trading fees and slippage on each trade and applies Hyperliquid's real hourly funding to every open position. It is still a simulation: fills are modelled, and past results don't predict future ones. How Keel works explains how the backtest and the live run use the same compiled strategy.
Start with a backtest
Sign up free and we'll email you when it ships. Your account works today: build a strategy, backtest it and paper trade it while you wait.