Investment management is a broad field which could involve institutions or individuals; however, for the purpose of this article, we took a look at the applications of AI/ML and Big Data in various domains or activities from the point of view of Institutional investment managers:
Natural Language Processing (NLP): NLP is a subfield of computer science and artificial intelligence which focuses on programming computers to process and analyze human language. Vast volumes of non-numerical data are generated every year by companies around the world in the form of annual reports and earnings calls. With growing applications of NLP in investment management, and coupled with ML techniques and data from non-traditional sources such as social media posts to identify trends have helped Investment managers to better predict the impact on companies in specific and market at large. Select applications of NLP in investment management are as follows:
Detect change in sentiments: NLP can analyze news coverage, earnings calls, management speeches, and detect a change in sentiments based on the tone of text or speech. E.g., Prattle (US-based startup) uses NLP and ML techniques to analyze text and sentiments. Prattle provides predictive analytics and automated research reports on communications...