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Pioneering Hedge Funds in Artificial Intelligence

According to a recent report from JPMorgan (NYSE:JPM), artificial intelligence (AI) is having a notable impact on the investment landscape.

Advances in AI and machine learning are presenting a sea of change in new data sets and methods to conduct investment analysis.

The emergence of new alternative data sets has led to fresh applications, such as the potential to use aggregate price data to analyze inflation, the ability to use satellite imaging to determine oil production and methods of anticipating sales estimates by acquiring data on customer transactions.

AI has also been involved in trade execution and high-frequency trading algorithms, says PwC. Firms have been quick to seize any advantages from very small price discrepancies through these algorithms.

With these developments, companies are applying new data sets and indicators for risk modeling, scalability in data processing and data analysis. Thus far, the leading purveyors of AI applications in investing have typically been quantitative hedge funds.

To learn more, the Investing News Network spoke with Rick Roche, managing director of Little Harbour Advisors, a company that uses a tactical investment approach by applying an algorithm to its investment strategy. Roche, a chartered alternative investment analyst, discussed how AI and machine learning can be applied to gain a competitive advantage in the investing space.

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