Methodology
The External Risk Profile is a complimentary, AI-generated assessment delivered by email when a user requests a report on a publicly listed company via the Polecat homepage. It provides a concise overview of a company's external risk landscape, drawing on the same data infrastructure and scoring methodology that powers the full PolecatX platform.
This page explains how the report is produced, what the classifications mean, and where the boundaries of the analysis lie.
What the report contains
Each External Risk Profile includes:
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An executive summary showing the count of risk categories rated High, Medium, and Low.
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A set of risk categories tailored to the company, each with a severity rating, a velocity indicator, an event count, a summary pill label, and a narrative analysis.
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Undisclosed risk flags identifying material themes present in media coverage that do not appear in the company's own public filings or disclosures (US-domiciled companies only).
Data Sources and Coverage Window
The report draws on Polecat's event stream, which aggregates content from global news media, regulatory filings, social platforms, and specialist publications. Events are deduplicated by ID to prevent double-counting across overlapping data streams.
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The default analysis window is 90 days rolling from the date the report is generated.
How Risk Categories Are Identified
Risk categories are not pre-set. For each company, an AI analysis identifies the most relevant thematic groupings based on the event data available. Categories are shaped by the company's sector, operating geography, and the nature of recent coverage. A typical report contains 5 to 10 categories.
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Each category includes a brief description explaining its scope and relevance to the company.
Severity
Severity reflects the average impact score of events within a risk category. Scores are derived from Polecat's event-level scoring model, which considers source reach, sentiment intensity, and stakeholder relevance.
Significant coverage with potential for material impact; likely involves major incidents, enforcement actions, or sustained negative attention
Notable coverage that warrants monitoring; may involve regulatory attention or negative sentiment
Routine coverage with limited reputational or operational implications
67 to 100
34 to 66
High
Medium
0 to 33
Low
Interpretation
Score Range
Classification
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For more detail on how event scores are calculated (magnitude, direction, and the underlying reach/credibility/tier/spread model), see the full PolecatX Methodology documentation.
Velocity
Velocity measures how the rate of coverage for a given risk is changing over time. It is calculated by comparing event frequency in the most recent 7 days against the preceding 30-day baseline.
Spiking
Recent 7-day event count is less than 0.75x the normalised 30-day average
Coverage is falling; the issue may be resolving, or attention is shifting elsewhere
Stable
Decaying
Definition
Recent 7-day event count is 0.75 to 1.25x the normalised 30-day average
Recent 7-day event count is 1.25 to 1.5x the normalised 30-day average
Recent 7-day event count is more than 1.5x the normalised 30-day average
Coverage is consistent with historical norms
Coverage is growing meaningfully but has not yet reached spike levels
Accelerating
A sudden, sharp increase in coverage, often driven by a breaking event, regulatory action, or viral story
Trigger
Classification
The 30-day baseline is normalised to a weekly rate (divided by approximately 4.28) before the ratio is calculated. Velocity is only computed when there are 3 or more events in the analysis window. Below this threshold, velocity defaults to Stable to avoid misleading conclusions from sparse data.
Summary Labels
Each risk category receives a summary label indicating the overall direction and tone of coverage.
Label
Both positive and negative coverage exists, or the picture is ambiguous
Notable warning signs are present: investigations, lawsuits, regulatory scrutiny, or whistleblower activity
No significant change in coverage patterns or sentiment
Mixed Signals
Elevated Concern
When Applied
The risk is growing or worsening: increasing event frequency, escalating severity, or new adverse developments
The risk is improving: fewer events, positive resolution signals, or declining media attention
Coverage is predominantly favourable: awards, positive regulatory outcomes, strong stakeholder sentiment
Risk Rising
Risk Declining
Risk Stable
Positive Trend
In all ambiguous or data-sparse scenarios, Mixed Signals is applied as the default.
Undisclosed Risk Flags
Where the AI analysis identifies material themes in external coverage that do not appear in the company's own public disclosures, these are flagged separately within the relevant risk category. This comparison is currently available only for US-domiciled companies whose annual 10-K filings are accessible via the SEC EDGAR API. For these companies, the system retrieves the most recent 10-K and compares disclosed risk factors against the themes present in external coverage. This comparison is indicative, not exhaustive; it is intended to highlight potential gaps between a company's stated risk landscape and the external reality visible in media and regulatory coverage.
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For companies domiciled outside the United States, undisclosed risk flags are not generated.
Limitations
The External Risk Profile is an automated preview generated from publicly available data. It is subject to the following limitations:
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Velocity calculations can be noisy for low-volume risks (fewer than 10 events). Interpret with caution.
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Summary labels are AI-generated and may occasionally reflect tone rather than measurable trend direction.
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Severity scores reflect media salience, not necessarily financial materiality.
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Risk categories are generated dynamically and may not align precisely with a company's internal risk taxonomy.
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Undisclosed risk flags are available only for US-domiciled companies with 10-K filings accessible via the SEC EDGAR API. They are based on pattern matching against disclosed risk factors and may produce false positives where a company addresses a risk under different terminology.
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The report covers a 90-day window and does not capture longer-term trends or historical patterns.
For a fuller picture, including trend lines, peer benchmarking, and the ability to ask follow-up questions, speak to our team at polecat.com.
Further Reading
The full PolecatX Methodology (x.polecat.com/help/methodology/) covers the data model, event creation pipeline, scoring methodology, and public perception modelling in detail.
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This report is generated automatically based on publicly available data. It does not constitute advice and should not be relied upon as a substitute for professional risk assessment.