Will artificial intelligence combined with the analysis of data collected in Big Data database systems be used in automated forecasting of valuations of securities and other assets on capital markets?
In the background of the plot of the film "Transcendence" from 2014, directed by Wally Pfister, the topic of analysis is analyzed by a computerized system combining artificial intelligence with human consciousness loaded into a computerized system of artificial intelligence connected to Internet resources and using the resources on its own.
This independence also means access to various databases, including internal Big Data database databases belonging to certain corporations, including listed companies that are issuers of securities.
The artificial intelligence connected to the Internet, according to a specific strategy, also independently conducts transactions on the market of valuable securities.
In addition, it establishes statrtsets offering innovative technologies, which in a short time become large capital companies characterized by a high capitalization of exchange quotations of shares of these companies listed on stock exchanges.
The above-presented film "Transcendence" presented above picture of integration of artificial intelligence, human consciousness and Internet resources is a picture of typical science fiction.
However, on the other hand, the function of this image is also to inspire to discuss the potential possibilities of integration of the above-mentioned elements into one system of autonomous and working in the Internet resources artificial intelligence, in addition also containing some human feelings.
The above image from the movie "Transcendence" became an inspiration to formulate the following question below.
The mentioned motif from the movie "Transcendence" looks impressive and convincing in this film mainly because it has a full spectrum of innovation.
The use of new, innovative instruments for forecasting specific economic categories usually works until these innovative instruments continue to be innovative, ie until they are disseminated to the majority of participants in specific markets.
In view of the above, I am asking you to answer the following question: Will artificial intelligence combined with the analysis of data collected in the Big Data database systems be used in automated forecasting of valuations of securities and other assets on capital markets?
Please, answer, comments. I invite you to the discussion.
Hello Dariusz,
The use of Big Data and AI (BDAI) has so many aspects and implications. Many methods from the BDAI spectrum are represented under the "deep learning" flag... at least, in traditional asset management. Old algorithms and methods are getting faster and putting together old models with new data... Many asset management models, risk analysis, and capital markets valuation originate in time series analysis and traditional statistics; some methods are now considered part of unsupervised learning, so that in this sense certain elements of machine learning have been present for a long time. A quick look to the Literature may take us back in time for at least 80-100 years. BDAI is aimed at increasing efficiency and effectiveness and decreasing costs, but it does not mean that responsibility for the results of BDAI is to be shifted to algorithm designs or to computers... There are so many aspects related to the use of BDAI in Capital Markets... For example, BDAI can lead to such a greater connectivity between markets and market actors. BDAI has the potential power to create new business models in financial markets. BDAI may predict the behavior and the needs of consumers – especially if financial data is combined with other data, which some companies, such as bigtechs, have in abundance, hello Google, Microsoft, Oracle! Therefore, any company using BDAI methods can exploit these to evaluate what consumers are willing and able to pay and then, they will charge accordingly. Then there is also the risk of unjustified discrimination: a good reason to raise consumer awareness of it. Financial transaction data is a valuable resource in the world of big data and artificial intelligence; it attracts the interest of companies outside the financial sector. In the world of finance, trust is an equally important resource, particularly with regard to how companies handle personal data. In any case, BDAI is and will only ever be a tool. Senior management will always be responsible for all the decisions made. BDAI will not change that. Hopefully...
The issues of the use of information contained in Big Data database systems for the purposes of conducting Business Intelligence analyzes are described in the publications:
https://www.researchgate.net/publication/323244120_The_Big_Data_technologies_as_an_important_factor_of_electronic_data_processing_and_the_development_of_computerized_analytical_platforms_Business_Intelligence
https://www.researchgate.net/publication/327035102_The_Technological_Solutions_Big_Data_and_the_Importance_of_Business_Analysis_According_to_the_Business_Intelligence_Formula
I invite you to discussion and cooperation. Greetings
True valuation of any asset class is present value of future receivables. Factors affecting future receivables may be both quantifiable as well as subjective to some extent. Past data analysis with big data & artificial intelligence can help in forecasting those factors and give better result, but is may not be considered solution to the problem.
Various techniques used in forecasting asset class valuation plays the role of small torch in the dark, big data analysis with artificial intelligence can increase the power of torch to some extent.
Yes it is already being done. But still, it can never replace the Human Mind and will only be one more Decision Support Tool.
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