Hedge funds embrace machine learning—up to a point -

Hedge funds embrace machine learning—up to a point

Credit: economist.com

  • Dec 07 2017 18:15About: 8 days ago
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ARTIFICIAL intelligence (AI) has already changed some activities, including parts of finance like fraud prevention, but not yet fund management and stock-picking. That seems odd: machine learning, a subset of AI that excels at finding patterns and making predictions using reams of data, looks like an ideal tool for the business. Yet well-established “quant” hedge funds in London or New York are often sniffy about its potential. In San Francisco, however, where machine learning is so much part of the furniture the term features unexplained on roadside billboards, a cluster of upstart hedge funds has sprung up in order to exploit these techniques.

These new hedgies are modest enough to concede some of their competitors’ points. Babak Hodjat, co-founder of Sentient Technologies, an AI startup with a hedge-fund arm, says that, left to their own devices, machine-learning techniques are prone to “overfit”, ie, to finding peculiar patterns in the specific data they are trained on that...Continue reading

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ARTIFICIAL intelligence (AI) already changed some activities including parts finance like fraud prevention fund management stock-picking. That seems odd: machine learning subset that excels finding patterns making predictions using reams data looks ideal tool business. well-established “quant” hedge funds London York often sniffy about potential. Francisco however where much part furniture term features unexplained roadside billboards cluster upstart sprung order exploit these techniques.These hedgies modest enough concede their competitors’ points. Babak Hodjat co-founder Sentient Technologies startup with hedge-fund arm says that left devices machine-learning techniques prone “overfit” peculiar specific they trained that...Continue reading

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