ChatGPT and other language models based on Artificial Intelligence could be useful in the financial market. Experts believe that these systems could be used to make more accurate projections about price behavior of shares in the stock market.
Alejandro Lopez Lira, a finance professor at the University of Florida, explained that in his case he uses ChatGPT to analyze news headlines in order to determine if they can positively or negatively affect a specific stock. Thanks to this, he was able to discover that the returns obtained using this strategy are, in his opinion, significantly better than performing analyzes manually.
The academic is not the first to raise the possibility of aUse these kinds of tools to help predict market behavior in such a way that it is possible to make better investment decisions. A report published by Goldman Sachs highlights that the use of AI could put at risk about 35% of the jobs linked to the financial sector since it would allow automating the functions performed by human beings.
“The fact that ChatGPT understands information intended for humans almost guarantees that if the market doesn’t respond perfectly, there will be predictability in returns,” Lopez Lira said.
The University of Florida professor’s comments come after he carried out an experiment in which he used ChatGPT to make projections of market behavior.
It should be noted that this experiment included the analysis of more than 50,000 headlines generated by a data provider that trades public stocks on the New York Stock Exchange. The data used corresponds to after October 2022, so they were not part of the ChatGPT database.
Thus discovered that ChatGPT has a higher hit rate than the average analyst can deliver.
The researcher said that this led to various investment funds expressing interest in the data obtained so that they can apply it in real transactions.
“As more and more people use these types of tools, the markets will become more efficient, so the predictability of profitability is expected to decrease,” the expert said.
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Source: La Opinion
