AI vs Human Analysts: The Results Are In, See Who Invests Best!

The amazing potential of artificial intelligence (AI) to disrupt the world of trading has been highlighted with the publication of a game-changing new study. Conducted by scholars from the Chicago School of Business, the study pitted OpenAI’s ChatGPT 4 against seasoned human financial analysts to see which could provide a more accurate prediction of corporate earnings. The results have shaken the traditional financial industry to its core, with far reaching implications for traders and investors across all asset classes.

The Research: AI and Human Analysts Go Head to Head

In the study, entitled “Financial  Statement Analysis with Large Language Models (LLMs),” the researchers, Alex Kim, Maximilian Muhn, and Valeri Nikolaev, tasked ChatGPT with predicting the future earnings of 15,000 companies, based on the financial statements that they  filed with the stock market. The statements were standardized and anonymized and the popular generative AI model was able to outperform the human analysts in its predictive capacity, even without the benefit of narrative or industry-specific data.

The AI was given a chain-of-thought prompt that mimics the way human experts process financial information. It was then able to analyze a mountain of complex data and extract the most relevant facts. The AI found the most meaningful insights to help it predict company earnings for the coming year, demonstrating exceptional decision-making capabilities.

The study concluded that generative AI models such as ChatGPT trained on historical data could achieve more precise forecasts of a company’s future revenues than a human expert. The accuracy rate for the AI was 60%,  3% higher than the average for the human analysts, and itmade sizable profits in backtesting, when used as a basis for model portfolios.

The Implications: Disrupting the Way We Trade and Invest

So, what does this mean for the financial sector moving forward?

First and foremost, the study has proven the reliability of AI-based financial forecasts, and the speed and efficiency that generative AI can achieve. The study reflects the growing capability of models like ChatGPT to process a wealth of information and perform financial analysis with unmatched accuracy. 

For traders in volatile markets like crypto, the speed of AI-based models provides a critical competitive edge. The ability of AI to track, analyze and predict global market trends, provide in-depth corporate insights, evaluate risk, and anticipate how stocks will perform with unparalleled accuracy is genuinely groundbreaking.

The study also adds weight to the supposition that as AI evolves, it is going to have an ever-expanding role in the financial markets. ChatGPT 5 is set to launch later this summer and is expected to take artificial intelligence-based trading to a whole new level, with enhanced automation and productivity. It will also display an improved ability to prioritize information and extract the data of  greatest significance as well as the capacity to process data from all types of media including  text, images, audio and video.

ChatGPT and similar generative AI models can harness large language models to analyze a wealth of structured and unstructured financial data from a range of sources. Using natural language processing (NLP) techniques they can comprehend and generate responses to complex prompts, identifying patterns that human analysts might overlook and providing traders with valuable real time market insights.

The Risks and Limitations of Relying on AI

The many advantages of AI in trading are evident, however, there are limitations to the capabilities of machine learning algorithms. For a start, an AI is only as accurate as the data on which it’s been trained. Flawed data can result in trades being based on inaccurate and biased information. In addition, since an AI bases its analysis on historical data, major, unforeseen market upheavals are unlikely to be anticipated. 

Another important factor to consider when it comes to the use of AI in market analysis is oversight. Regulators face a massive challenge in trying to guarantee a transparent trading environment free of market manipulation, in which those deploying AI-based financial platforms are behaving ethically and responsibly. 

How Retail Traders Can Leverage Generative AI

Here at AlgosOne, our strictly regulated, one-of-a-kind AI-based trading platform is blazing a trail in its innovative use of generative AI tools combined with proprietary deep-learning networks.

The AlgosOne algorithm analyzes a vast amount of data in hundreds of languages from a huge array of traditional and alternative financial data sources. It is learning and improving with every new piece of data to become increasingly accurate at anticipating future patterns, adjusting risk parameters and executing trades accordingly. 

Our AI requires no coding, no strategy building, analysis or backtesting. Once a user signs up, depositing either fiat or crypto,  the algorithm takes over and it has an incredible, consistent, annual trade success rate averaging 80%! 

The AI is free, so users get to keep their capital. There are no subscription, deposit or transaction fees, just a commission, which is only ever charged on trades that result in a profit.

Users are trading in a licensed environment, with a reserve fund offering comprehensive client capital coverage. In addition, there is a team of human risk management specialists that are constantly monitoring the markets and the AI, able to intervene if required.

Later this year, AlgosOne users will also be able to benefit from the launch of the AiAO token, which is designed to not only provide the holder with voting power over direction and development priorities of the platform, but to provide actual ownership, with the payment of regular dividends based on AlgosOne revenues. Token holders will also benefit from assured price appreciation, as the price of AiAO will be raised by a minimum of 50% at each sale stage, Also AlgosOne guarantees to buy a minimum of $100M worth of tokens during the public sale.

As the above-mentioned study proves, AI is now an essential financial tool. The world of trading and investing is transforming in front of our eyes with the help of generative AI technology, and is becoming accessible to everyone with an internet connection. As AI continues to evolve, new financial opportunities will emerge and those who don’t embrace this rapidly developing technology and leverage the power of AI to improve their performance will get left behind. 
To learn more about the latest developments in the areas of investing, crypto, and AI technology check out the AlgosOne blog.