AI For Asset Management & Trading

Performance Investment Strategies and Deep Learning

How to reduce risk and improve performance

of investment strategies

The AI solution applied to Asset Management provides predictive models to support investment strategies based on AI and Deep Learning.

Accuracy and stability are the benefits of the predictive models that are mainly used by the portfolio manager as a component in investment strategies of different financial markets (equity, bond, commodity, forex, etc.).

Peculiarities

The solution offers different services, depending on the level of customization required:

  • off-the-shelf for performance and risk forecasts (economic return, volatility, Sharpe ratio) of various assets;
  • customized predictive models according to the target assets and investment horizons selected by the client, and any proprietary data that the client provides.

The predictive models underlying the offer are built usin proprietary technology that allows PPS team to be extremely efficient and rigorous in model training and to avoid typical problems of building quantitative models (overfitting and data leakage). Enabling a total automation of the process and achieving consistent performance of models over time.

Applicability

A resource for:
  • Asset manager, to obtain portfolio performance above the benchmark of the reference market while maintaining volatility (riskiness) as low as possible.
  • Hedge fund that, in addition to higher performances, need to operate on niche financial instruments, with more aggressive investment strategies.
  • Corporate trading desk that aim at implementing hedging strategies to minimize risk against fluctuations in the price of commodities (commodity market) and/or foreign exchange (Forex market).
Challenges

Over the next 5 years, systematic investment strategies based on artificial intelligence will revolutionize asset management and grow to an estimated market value of over $120 billion.

The asset management sector in general, has the need of reducing risk and improve the performance of investment strategies but, has demostrated difficulties adopting solutions based on AI due to an internal lack of technolog, skilled personnel and a lack of credible external partners, able to offer high value consultancy with appropiate standars of the sector

PPS meets this need by making the best use of AI to ensure customers the desired improvements and thus increase the value extracted from the available data.

AI Asset Management Solution offers:

Performance: Focus on stability of predictive models as well as their performance.

Transparency: Portfolio managers are given maximum transparency on the model development process used, so as to mitigate any doubts (both technological and financial); insights of the logical processes of predictive models are provided thanks to proprietary technology components, allowing portfolio managers to have greater understanding of and confidence in technology.

Timing:Results are delivered in a time that is a fraction of the standard, keeping traction on the project and allowing the portfolio manager to benefit from the technology in a very short time.

Cases of success

Nikko Global Wrap (Sumitomo Financial Group):

Based on the various data provided by the client nikko Global Wrap have been built investment strategies based on Deep Learning. Working together on traditional and alternative data and on the various Deep Learning architectures (also based on genetic algorithms) very interesting results have been achieved both regarding the forecast of the prices that from the point of view of the performance of the investments.
The client provided an overview of R&D and a platform to test the efficiency of investment strategies. The team has carried out the work in a professional way, continuing and strengthening the partnership between the companies.

The results translated into data:
Annual yield: 6.15%
Sharpe Index: 0.84

Proprietary trading
Short- and long-term strategy on a pool of 8 commodity futures (T0) with dynamic rebalancing.

The results translated into data:
Annual yield: 6.15%
Sharpe Index: 0.84

Compensation & Guarantee Fund (London Stock Exchange Group)
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