Can you beat the market, consistently? Machine Learning can

Posted by K1 Digital on Aug 22, 2019 3:20:00 PM

Having information is key. Understanding the right information is a success.

And these are the two features where artificial intelligence seems to be winning over human capabilities in stock picking.

Decision about picking a specific stock or security and creating an investment portfolio that could beat the market has to be supported by in-depth analysis and accurate forecasting, as well as extensive market knowledge, and acting according to goals and strategy of an investor. Portfolio managers are responsible for that, of course supported by software and computing systems, however this is the type of decision that takes into consideration such a complex set of variables and unknowns, that managers can never be sure of the final outcome.

Portfolio managers and investors can take advantage of technology development and employ robo-advisors to support decision whether to include particular stock in the portfolio and in which proportion. However, there is one aspect of robo-advisory that makes is not really a perfect solutions. Robo-advisors are still robots that are not designed to make better decisions, but to act according to a set framework. Software robots, of course are designed to improve, however their learning curve is not as developed as capabilities of machine learning solutions, which learn with each piece of information.

Human ability to make decision is still difficult to replace, however the capability to gather information and analyze it is an area where artificial intelligence should take a lead. Not only can AI gather huge amounts of data from different sources, discover market signals, but also it is able to present non-obvious patterns in data and according to assumptions, test them in a model in order to get the best result possible.

Is that a time to replace portfolio managers with artificial intelligence? Not yet. There are still aspects in which human experience, logical thinking and ability to make decisions with consideration of qualitative data, makes human irreplaceable.

How about supporting active portfolio managers in choosing the most promising stocks to build a successful portfolio? What if they could have an instant access to price forecasts of the stocks they are interested in? What if investment decisions could be supported by a reliable tool that takes into consideration over hundred different variables and market ratios to forecast future value?

This is just the beginning of possibilities that K1 Digital can give you with our machine learning solution dedicated to portfolio managers and stock investment. It works on various data available on the market, is easy to integrate and use.

We believe in human-centered machine learning that empowers people with knowledge.

Join K1 Digital and the entire AI community at this year's World Summit AI in Amsterdam. View the full programme, speaker line up and book tickets by visiting

World Summit AI 2019
October 9th-10th
Amsterdam, Netherlands


Topics: AI, Machine Learning, Financial Industry, Investment Funds