Capstone Projects: Measuring Its Impact on Cornell Financial Engineering and Beyond

This academic experience has proven to be conducive to teamwork, leadership, and innovation, all of which our graduates demonstrate as they enter the workforce. Cornell MFE alumni have gone on to prestigious hedge funds, banks, and tech companies, with many citing their projects as key to their success.

CFEM Head of Research Sasha Stoikov has overseen all project teams for more than fifteen years. “I'm very proud of the state of our Financial Data Science (FDS) projects.  Like all science, they sometimes strike gold, but success is not guaranteed. They give students the chance to apply ORIE tools to financial engineering problems, while working in teams. It's a great way for our Masters students to get involved in quant research."

Last year’s cohort consisted of several outstanding teams whose exemplary research produced actionable results. 2024 sponsors included Vanguard, Greenmantle, Barclays, AllianceBernstein, and Deutsche Bank. Here are some of the most recent highlights of projects that were posted on SSRN, an open-access, online platform and repository for scholarly research:

1) Hummingbot Team: "Market Making in Crypto" (3,560 downloads)

The team built trading bots for crypto that actually ran live with a very small capital. They created a special signal called "Bar Portion" that helps predict price movements across different cryptocurrencies. After testing their system on the open-source Hummingbot platform, they ran it with real money for 24 hours on several crypto pairs and beat out-of-the-box market making algorithms. 

2) Crescendo Royalty Corporation: "Pricing Music Royalty Assets" (369 downloads)

The team developed a formula that determines fair pricing multipliers of music royalty assets based on a song's age, verified with actual market data collected on the Royalty Exchange platform. The approach worked in two steps: predicting future song earnings using decay models, then calculating the present value with a discounted cashflow model.

3) Bloomberg: "Election Arbitrage" (421 downloads)

The team found a way to make money in the markets during the last election. They tracked when betting odds moved in favor of either Trump or Harris and identified investments that did well in both scenarios. Their strategy generated 15% returns over the two weeks following the election.

As Cornell MFE students continue to make large strides, we eagerly await the next round of capstone projects and the breakthroughs to come!