German researchers have proved that artificial intelligence can make the most beneficial investment decisions. For the first time ever the team of scientists used AI for analyzing market data and found out that AI could formulate a strategy for increasing the annual profit by 30%.
AI technologies can replace human traders
AI technologies are able not only to recognize natural speech and images, but also to predict particular events. For example, economic development of companies. Automated self-learning platform can analyze quotation of securities for a particular period and develop a beneficial investment strategy taking into account the data.
Unlike human traders who are emotional and subjective while taking decisions, artificial intelligence relies on facts. Moreover, it works even better in periods of financial crisis.
During the experiment AI system analyzed data of everyday stock market trades by 500 largest American companies from 1992 to 2015. The system developed an investment strategy with an annual profitability of 30%.
Despite a wonderful result, the leading researcher highly recommended using AI in trades very carefully. According to him, lots of companies use robots for trade strategies which means that profit of all market players is decreased.
Nevertheless, Bernstein experts believe that in the future almost all companies will use robotic financial consultants which can help to effectively manage assets and make profitable investments.
Cindicator – an AI app for exchange trades
Cindicator is an example of a useful instrument for formulating profitable strategies.
Its working principle: 500-800 users make forecasts regarding quotation of securities, AI analyzes the data and gives its final result. A part of profit received by app developers thanks to the AI system is divided among users. The amount of dividends is proportional to the quality of a user’s forecast.
The cost of shares of the fintech startup which launched the app increased by 168% in the last 6 months. Users forecasting the cost of shares got more than $24 000 in total.