Some research documents in Eikon are displayed with star ratings - one set of stars for Estimate rating, another set for Recommendation rating. These ratings are not an assessment of the content of the document - we are not in a position to tell whether following the recommendation to buy is going to make anyone rich or not. Instead, document rating is in fact the rating of the document's author, based on how well his past predictions matched the reality.
There's a number of systems involved in calculating the document ratings. First, we collect analyst estimates and recommendations. Some analysts deliver that information to us in computer-readable format. Others deliver research documents only, and we try and extract the estimates from that.
Next, Starmine system compares the past estimates and recommendations to the actual market data, and assigns ratings based on how well the estimates matched the market. The ratings are competitive - i. e. we do not assign the rating based on an absolute or relative error value, but rather the analysts with the best estimates get the best ratings. There are 2 types of ratings - single stock rating for estimating performance of an individual company, and overall rating based on all the companies rated by the analyst.
Finally, the analyst ratings are assigned to research documents. For that to happen we need to assign correct analyst to document (which is nontrivial sometimes) and determine the subject of the document. If the document is about a single company, we use single stock rating for that company, otherwise we use overall rating.
Analyst ratings change over time, as more estimates are added into the calculation. Document ratings are updated along with analyst ratings, so all documents by the same author and on the same subject will have the same rating.
If the document has multiple authors, we pick the rating of the first author.
The ratings are based on past performance, so earning a rating takes time. Recommendation ratings are based on performance over 24 months.
