An AI Robot-Analyst System for Investment Analysis
Citation
Bar-Mor, Hidai. 2022. An AI Robot-Analyst System for Investment Analysis. Master's thesis, Harvard University Division of Continuing Education.Abstract
Financial analysts have long been performing stock price forecasts. Theseanalysts, being human, are limited by heuristics and biases which impact their forecast
accuracy. Recent advances in machine learning research have opened the door to
automation of human analysts' work and have rendered it faster and more efficient. In this
study we propose an automated financial analyst that predicts stock prices one year
ahead. We later compare its performance to human analysts. The robot-analyst utilizes a
rich mixture of quantitative financial and stock related text data features fed into machine
and deep learning algorithms to forecast one-year ahead stock prices. Comparing the
robot-analyst’s predictions to the human ones revealed that, on average, the robot
outperformed the human analysts by 19% in terms of RMSE. Simulation of investments
done following the robot-analyst recommendations showed that our robot surpassed
human analyst returns on most of the stocks we analyzed and led to higher rates of return.
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