Most investors are already aware that AI and deep learning can add value to the investment process and enable investment management firms to enhance their decision-making process. But integrating AI signals into the existing investment process can generate more benefits than just that.
AI is an objective reference point for investors; therefore, it can help them remove undesirable human biases from the investment process and decision-making.
Benefits from automated stock screenings
Artificial intelligence transforms the investment management industry by allowing analysts to examine and process data faster and find accurate investment insights. Without AI, portfolio managers would have to spend many hours/ day manually researching hundreds of data sources. Some investment insights may come only from digesting extensive data, which would take enormous time and effort for a human being to process.
It is not only a question of time and computational power; it is a question of the reliability of the entire process and its integration with the existing. Only an automated machine learning system like Axyon IRIS® ensures reliability and minimizes human bias, the first crucial step to integrating AI.
“No man is better than a machine, and no machine is better than a man with a machine.”
Richard Bookstaber
Risk and portfolio management
By using techniques that examine big data more efficiently, investors can improve risk and portfolio management and remove human bias from the investment process. Besides, AI can also enable investors to optimise their analytical techniques and generate more accurate insights from different data sets.
An original source of investment ideas
Investors can use AI signals to review or improve existing ideas or generate new investment ideas. This allows AI to add value by providing a different point of view with respect to ideas generated by a discretionary process.
Let’s take a look at some practical application examples:
EXAMPLE 1
PROBLEM:
An investor wants to set up an equity strategy that invests in a large set of countries and must pick the top performers within each country. As there are many stocks to choose from, the investor needs a simple way to implement the idea, which lets him devise an efficient process to manage the portfolio.
SOLUTION:
The investor could filter stocks using Axyon AI’s rankings by country and consider only the top predicted performers of each country as potential stock picks. This would help asset managers filter out many alternatives and easily restrict the consideration set for their investment choices and further analysis. In addition, they would be able to set up a transparent, objective, and efficient process to manage their portfolio.
EXAMPLE 2
PROBLEM:
An investor wants to build a strategy based on sector rotation on a predefined investment universe but needs a methodology to rank sectors according to their predicted relative performance.
SOLUTION:
The investor could aggregate Axyon AI’s ranking by sector to produce a predictive sector ranking. That sector ranking would help the investors restrict the cluster of investment choices to the predicted top-performing sectors or simply consider the model’s predictions in their discretionary investment approach. Again, the investor would be able to set up a transparent, objective and efficient process to manage the entire portfolio.
Axyon IRIS® is a suite of AI solutions that uses leading-edge artificial intelligence technology to support asset management in improving alpha generation and portfolio management. In simple words, the outputs generated by Axyon IRIS® are:
- AI-based predictive assets performance rankings
- AI-driven strategies with different investment universes and risk-return profiles.
Do I need to have coding knowledge to use Axyon IRIS®?
No coding knowledge is required to use or access our easy-to-use web application. You can also access it from multiple devices.
Can I have a demo of Axyon IRIS®?
Yes, you can request a demo to see exactly how our AI engine works or request a 7-day trial today here: