Japanese investment manager Nomura has conducted a proof of concept (PoC) study to examine whether using artificial intelligence (AI) analysis can contribute to increased accuracy of portfolio managers' investment decision-making.

Portfolio managers at asset management firms usually have to process and analyse a large amount of information which includes not only analyst reports, but also various news sources, industry blogs and social media, to make forecasts and determine the impact on stock prices.

Working in collaboration with Normura Research Institute, the pair used AI technology to analyse all the information a portfolio manager would consume and score them into two groups; either positive (indicating that company performance or corporate value is likely to rise) or negative (indicating these factors are likely not to rise). This PoC is one of the first full-scale efforts made by a Japanese asset manager to analyse and score analyst reports using AI.

The result of the PoC highlighted that analysis of analyst reports using AI enabled the quantitative assessment of information which portfolio managers usually see as qualitative. In addition, even text information from news websites and blogs could be quantitatively scored and used to enhance the ability of portfolio managers to make investment decisions.

In the future, it is expected that more information that could not have been captured by humans qualitatively, will be available as quantitative information and utilised for investment decision-making.

Share Story: