There are many discussions around the world regarding artificial intelligence in investment. How is it used in investment and what will it do in coming future in this domain?
Everyone, either individual or corporate, invests money in order to get the returns to meet the targets. Everyone wants a good return on the investment. Individuals generally take help from investment advisors. Corporates hire experts for investment analysis or go to investment bankers. Earlier, the investment advisors or investment bankers help in investment based on the fundamental analysis and their knowledge. But the time has changed and the 21st century has seen many intelligent changes. Artificial intelligence (AI) and machine learning techniques are dominating in almost every sector. It has a large and highest profit-earning application in the financial sector. In this post, we will discuss the application of AI and machine learning in the financial market and investment analysis. We will also discuss its future.
What is Artificial Intelligence?
Artificial intelligence is a branch of computer science which focuses on the development of intelligent machines. The machine may be a hardware device or it may an application software. There are many important applications of artificial intelligence and it is dominating in the many fields. From Unmanned Aerial Vehicle (UAV) for attacking in a war to Google’s home assistant, it has a wide range of applications. Machine learning, a technique of artificial intelligence has a great application from the e-commerce market to security. It is playing an important role in the financial sector also.
Artificial Intelligence in Finance
Artificial intelligence is being used in the financial sector in a full swing. It has a number of applications in this sector. To detect the possible frauds in the banking system, it helps in risk management. In portfolio management, there are various AI-based softwares are used. Robo-advisor is the example of such application which is used in financial advice. In stock trading, artificial is used in automatic buying and selling. There many data analysis methods which are based on machine learning used in stock market prediction. These techniques used to predict the future price and performance of a stock.
Artificial Intelligence in Investment
The decision support systems and recommender systems are the tools of artificial intelligence which are used in investment decisions. On the basis of past performance and available model, these systems help the management in making decisions. There are many machine learning techniques, which use the historical data of a company and predict its future performance. This helps in identifying the future of a investment.
What is the Future of Investment using Artificial Intelligence?
There is a bright future of investment with artificial intelligence in very few coming years. In trade processing, there are several companies who have developed systems which can identify potential trading strategies and executes the order automatically. This is just a beginning, there is a lot to happen in this domain. The predictive analytics methods are used in full swing in investment analysis. Artificial neural network and other machine learning based predictive models use historical data to predict the future performance of any company. There are many methods whose potential is yet to be explored in this field. Seeing the continuous research in the field of data science, it is sure that there much more to happen in investment analysis.
Right now, there are many software and techniques, which tells the investor about the future value of an invested amount. Many models give prediction with an accuracy in the range of 60-75%. But as we know that, there are many factors in the market which affects the variable income investments. Deep learning techniques are also being explored in the domain of predictive analytics which are giving more accurate results as compared to conventional machine learning techniques. There are natural language processing methods which are being implemented nowadays to use the text data in predictive analytics. It may use news data and tweeter data in order to make accurate predictions.
So it is certain that with the implementation of latest machine learning and artificial intelligence techniques, there are many positive changes will be seen in coming future in the work of investment analysis. This will definitely impact the financial institutions in order to higher profit earning.
Tags: #Investments #Artificial Intelligence #Machine Learning #Stock Prediction
