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How accurate is machine learning for stock market prediction?

How accurate is machine learning for stock market prediction?

Artificial Intelligence & Machine Learning

Today we take a look at research from PredictNow.ai’s Ernest Chan, Haoyu Fan, Sudarshan Sawal & Quentin Viville!

Conditional Portfolio Optimization: Using Machine Learning to Adapt Capital Allocations to Market Regimes!

“Conditional Portfolio Optimization is a portfolio optimization technique that adapts to market regimes via machine learning. Traditional portfolio optimization methods take summary statistics of historical constituent returns as input and produce a portfolio that was optimal in the past, but may not be optimal going forward. Machine learning can condition the optimization on a large number of market features and propose a portfolio that is optimal under the current market regime.”

Dr. Ernest Chan said of the research;

“Optimization used to be about finding the best solution for the past. Using machine learning and big data, we can optimize for the future instead. Our CPO method demonstrates how we can take into account the current market and macroeconomic regime when optimizing for the future.”

Read the full paper:

Conditional Portfolio Optimization: Using Machine Learning to Adapt Capital Allocations to Market Regimes by Ernest Chan, Haoyu Fan, Sudarshan Sawal, Quentin Viville :: SSRN

How accurate is machine learning for stock market prediction?