Artificial Intelligence (AI) is playing an increasingly important role in a growing and significant number of sectors. It is precisely for this reason that I often wonder about areas where AI will not play an important role. Although I have a few hypotheses, I believe that the final answer will only come in time.
To date, the very interesting aspect is that, in some cases, the process of AI expansion has already achieved concrete and very tangible results, starting a real revolution of the entire sector in question.
To better understand the current state, I analysed the last Invesco’s Global Systematic Investing Study, which devotes an entire chapter to the use of artificial intelligence in investing. Invesco is an American leading global investment management firm that offers a wide range of products and services to meet the needs of a variety of clients. The Global Systematic Investing Study is an annual report conducted by Invesco that examines the effectiveness of systematic investing. The report is based on an analysis of a wide range of data, including returns, volatility, and correlations.
This study focuses an entire section on AI. It explains how AI has the potential to revolutionise the investment world and how it can be used to improve the efficiency and accuracy of investment processes, as well as to identify new investment opportunities.
The study identifies three main ways in which artificial intelligence can be used in investments: Data analysis, Risk management, and Automated trading.
Artificial intelligence can be used to analyse large amounts of financial data. This can help investors identify trends and opportunities that may be difficult to detect with traditional methods. Moreover, AI can be used to develop risk models that can help investors assess and manage the risks associated with their portfolios. The last area where AI can be used successfully is the development of trading algorithms that can be used to make trades automatically. This can help investors reduce costs and improve performance.
Focusing on the Invesco report, there are some interesting data that support these topics. The survey clearly shows that AI is already being used for several important tasks, particularly to better understand the background and spot turning points in macroeconomic trends. For example, 38% of the respondents use AI to define their portfolio allocations and for risk management, while 46% of them use it to find patterns in market trends. Specifically, responders like the AI’s capacity to help investors to reduce human biases and forecast what it is unexpected.
The report evidence why it is reasonable to think that in the upcoming years, AI will become more and more common. Currently, only 29% of respondents use AI to develop and test strategies, while around the 76%, intend to use it in the future. Moreover, only 20% of users currently track and adjust their positions in real time, but over 55% say that they intend to do so in the near future.
From the Invesco’s report, it is realistic to conclude that artificial intelligence is an emerging technology that has the potential to significantly impact the investment world. The study concludes that the use of artificial intelligence in investments will continue to grow in the coming years. Artificial intelligence has the potential to revolutionise the investment world by improving the efficiency, accuracy, and profitability of investments.
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