Ai for Alpha is integrating generative artificial intelligence solution into its asset management models, the company’s chief executive has told QA Financial.
Beatrice Guez, who leads the Paris-based fintech firm that specialises in leveraging machine learning for advanced investment strategies, said she greenlit the integration because “generative AI can synthesize and interpret news and investor sentiments from multiple sources and translate them into actionable investment decisions.”
By utilizing advanced technologies like RAG, or Retrieval Augmented Generation, generative AI can analyse a variety of sources, offering an up-to-date perspective on investor sentiment and market trends.
Investment professionals find it valuable to combine the analysis of investor sentiments with market indicators such as trends, risk aversion, and other market factors, Guez pointed out.
“We decided to use AI technology to merge investor sentiment with quantitative market indicators.”
Beatrice Guez, CEO of Ai for Alpha
Ai For Alpha is a provider of AI-powered market signals and investment models and works with dozens of asset managers, banks and other financials services firms across Europe, North America and large parts of Asia.
Guez added that “the entire team is excited by this innovative approach as it represents a significant advancement in optimizing investment processes through the application of generative AI technologies.”
Risk-reward profile
Zooming in on the specifics, the company’s head of business development, Thomas Jacquot, explained that “our strategy combines traditional indicators characterizing financial stress on major asset classes, such as implied volatility and credit spreads, with indicators derived from Generative AI models that characterize investor sentiment on stock markets.”
He added that “taking positions based on these two indicators significantly improves the risk-reward profile for stock market investors, enabling them to limit major losses while profiting from the most favorable expansion phases.”
Jacquot said the Gen AI-powered model will bring substantial improvements in the risk management of his clients’ equity portfolios.
The next step will be implementing the approach with the company’s asset management, banks, and insurance partners and clients, he concuded.
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