Robots-analysts versed in buying shares better people

automation has long affected the financial services sector. The algorithms are used as a replacement (but still partial) traders and financial advisors. Artificial intelligence can analyze data from databases, files, and internal documentation and then make stock reports to banks. The software can quickly and cheaply generate information reports that allows companies to publish more reports and marketing materials.

In the long term, according to research by Indiana University, robotic intelligence, apparently, give more favorable stock recommendations than analysts-people.

the Researchers studied 568 76 report issued by seven companies using robots analysts in the period from 2003 to 2018, and published their preliminary results.

They found that the stock portfolios collected on the basis of recommendations from the Robo-analysts, more profitable than those made by analysts-people. This suggests that the recommendations of Robo-analysts for the purchase of shares are more profitable.

furthermore, the researchers found that the Robo-analysts together to provide a more balanced distribution of recommendations for buying, holding and selling, than human intelligence, and rely less on periodical reports on the profits of the companies in the conduct of its analysis.

Robot-analysts should also be distinguished from their close “relatives” — the robots-advisers.

Despite the similarities between them, Robo-analysts tend to be more deeply immersed in the study of documents and databases of the Commission on securities and exchange Commission (SEC) for the analysis of Finance companies, while the robots consultants typically perform more serious tasks, such as determining strategies for asset allocation on the basis of the survey.

But financial analysts, worried about the loss of a job, not yet need to sound the alarm.

on the one hand, robots don’t seem to outperform human analysts, when it comes to the other side of the work: recommendations on selling stocks. The study showed that there is “no evidence” indicating that the recommendations of robots analysts selling be more beneficial than recommendations from analysts-people.

the More relevant question is how seriously investors are recommendations from robots. Moreover, it is likely that robots-consultants can become the dominant force on wall street.

For example, it would seem that the traditionally conservative Goldman Sachs developed a market of robot-consultant. The automated platform may be based in part on algorithms, which Goldman acquired along with the company’s financial management United Capital for $750 million in may last year. Goldman Sachs is also considering launching their robotic developments for financial advisers on the United Capital platform.