Artificial intelligence AI from IQ Smart Capital company for investment

Modern technologies for working with large data arrays provide incredible opportunities for analysis and forecasting, extracting value from available information. Artificial intelligence technologies in investments are no exception, they allow you to analyze large amounts of market data, identify trends and patterns, and also make it possible to adjust portfolio parameters to obtain the required return potential and minimize portfolio risk.

Artificial intelligence from IQ Smart Capital in investments

Artificial intelligence developed by IQ Smart Capital processes the market historical data of portfolio assets and suggests possible combinations of weights for each individual asset in the portfolio to obtain the best result, taking into account the risk level of the entire portfolio.

The data is analyzed every day on a rolling basis and takes into account many parameters of each individual asset, as well as the behavior of the S&P500 broad market index. The system proposes the distribution of capital between portfolio assets, calculates the level of market risk of the portfolio (Beta), calculates the level of portfolio volatility (Standard Deviation Annualized) and the expected return of the entire portfolio (Expected Return Annualized).

Artificial intelligence from IQ Smart Capital opens up incredible opportunities for profitability, which is extracted from market inefficiencies. Such inefficiency is analyzed by our artificial intelligence, and when there is an opportunity to extract significant benefits, artificial intelligence helps to decide on the best entry point to the market for the entire portfolio, allows you to effectively allocate capital within the portfolio, while optimizing the expected return and minimizing risk.

What data does the artificial intelligence of IQ Smart Capital analyze?

Artificial intelligence from IQ Smart Capital analyzes the historical prices of all portfolio assets, price behavior, volatility, correlation, asymmetric bursts, and also analyzes the behavior of US economic sectors and the S&P500 broad market index.

The system analyzes several factors of the behavior of each asset in the sector, the behavior of the asset in relation to the market and to its sector. In addition, the artificial intelligence system takes into account the parameters of the CBOE VIX Volatility Index, which makes it possible to further analyze and take into account the behavior of the volatility index.

Advantages of artificial intelligence IQ Smart Capital for a long-term investor

The most important advantage of artificial intelligence from IQ Smart Capital is the ability to independently build the Efficient Frontier for a specific portfolio, select the optimal parameters of expected return and risk for this portfolio. At the same time, the acceptable options for the distribution of capital in the portfolio, which were proposed by artificial intelligence, can be further adapted by the AI algorithm for each such option.

All these artificial intelligence technologies from IQ Smart Capital provide the ability to make decisions on expected return and risk for the best optimal application of portfolio parameters that will outperform the market return per unit of risk.

This approach helps to accept and choose the best ratio of expected return and risk for a specific risk profile of a particular investor (that is, for the level of risk tolerance he needs). This means that the same investment portfolio can be adapted by AI for investors with different risk profiles, and have different potential for growth in the value of the portfolio.

Artificial intelligence IQ Smart Capital when building an investor's portfolio

Artificial intelligence from IQ Smart Capital is still working at this stage of its development with a specific list of assets offered by a client or investor. And so far it cannot independently select assets for the portfolio, but it can filter by internal rating assets that have the best potential for market superiority per unit of risk.

When building an investor's portfolio, artificial intelligence processes a specific list of assets and at the same time does not independently recommend investing, buying or holding assets in the portfolio, but calculates the most optimal combination of assets in this portfolio.

The main focus of artificial intelligence technology from IQ Smart Capital is on optimizing the potential of the expected return of the portfolio per unit of risk, which makes it possible to obtain the best optimal combination of asset weights in the portfolio to minimize risk and obtain the optimal expected return.

All this ultimately leads to a positive alpha (Jensen's Alpha) for a particular portfolio in the medium- and long-term investment horizon. It is the positive Alpha that is ultimately the result of the work of artificial intelligence for the investment portfolio.

Artificial intelligence IQ Smart Capital and market inefficiency

This incomprehensible and inexplicable essence - the inefficiency of the market, which many do not recognize, was the basis for the work of our specialists in the creation of artificial intelligence. For the most part, retail investors and institutional fund managers are rational, fearful, and have a moderate desire for a return on their investment. But, is it really so, because people sometimes behave absolutely irrationally?

Information that is available to the entire market, which is visible and understandable, is sometimes not fully used to make investment decisions, perhaps banal human laziness makes us refuse the opportunities that appear on the market.

Often, institutional investors are simply already 95-98% invested in order to change their portfolio for obvious market opportunities that appear, since it is quite difficult and costly to get large positions and bring the portfolio to the desired balance. In addition, the strategies of institutional investors usually have their limitations and risk limits.

Artificial intelligence from IQ Smart Capital allows you to see the emerging market inefficiency and form an investment portfolio in such a proportion that will bring the best optimal return per unit of risk and will have a high potential for obtaining a positive alpha in the medium- and long-term investment horizon.

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