Browsing: Data Science & AI

Data Science & AI

Implementing a Data Strategy for Private Markets

May 18th, 2021 | Filed under: Data Science & AI, Featured Post, Newly Added

By Ronan Crosson, CFA, Director, Data Strategy & Analytics at Eagle Alpha For many PE funds there are strong push factors driving the move to alternative data. Historically low-interest rates are pushing more investors to consider PE as a viable investment, but how does a PE firm stand out? To stand outRead More


Alternative Data: The Gateway to Global Markets

Mar 21st, 2021 | Filed under: Data Science & AI, State of the Industry, Featured Post, Newly Added

By Tom Nigro, Head of North America at GTCOM-US The COVID-19 pandemic and its vast impact have pushed businesses in all industries to adapt. When it comes to the investment landscape, we’ve seen an influx of data-driven investors and analysts looking to increase the sheer level of information they’re utilizingRead More


Improving Time Travel in Long-Term Investing

Feb 4th, 2021 | Filed under: Data Science & AI, State of the Industry, Featured Post, Newly Added

By Ashby Monk and Dane Rook, Stanford Global Projects Center To succeed at investing, you must master time travel.[i] You need to be proficient at beaming yourself into a hypothetical future, and then analyzing the best route to get “there” from the actual “now.” And the route itself is crucial:Read More


Systemic Impact and ESG Investing in Smart Cities

Feb 2nd, 2021 | Filed under: Data Science & AI, State of the Industry, Featured Post, Infrastructure, Newly Added, ESG, Commodities & Natural Resources

What is a smart city? By definition, a smart city is “a city that uses technology and data purposefully to make better decisions and deliver better quality of life.”  Technology is intricately embedded into the everyday life of city dwellers through network devices, applications, and widely distributed usage.  The combinationRead More


Hedge Fund Battle: Discretionary vs Systematic Investing

Dec 15th, 2020 | Filed under: Data Science & AI, State of the Industry, Featured Post, Newly Added, Hedge Funds

By Nicolas Rabener, CAIA, Factor Research & Karl Rogers, ACE Capital Investments INTRODUCTION Anyone who has watched the hit TV show “Billions” will have noticed that the hedge fund billionaire Bobby Axelrod and his former lieutenant, and occasional nemesis, Taylor Mason have totally different trading styles. Bobby, although mathematically gifted,Read More


Growing a Green Decision Tree—Machine Learning and ESG

Nov 23rd, 2020 | Filed under: Data Science & AI, State of the Industry, Featured Post, Newly Added, ESG

Assuming that the growth of environmental, social, and governance-based investing is not yet at, but is approaching, a tipping point, and assuming that knowing that tipping point with precision will yield alpha, can machine learning help find it? That is the question posed in a recent paper by the globalRead More


What About Beta? | The Kudlow Report(s)

Oct 26th, 2020 | Filed under: Data Science & AI, State of the Industry, What About Beta?

By Bill Kelly, CEO, CAIA Association Maybe Howard Marks was right when he wrote about Investing Without People. In that memo he talks about the machine which can largely excel at anything that is quantitative and can be counted: in games like chess and Go, the machine can study andRead More


The Alternative Imperative, Part II

Oct 25th, 2020 | Filed under: Data Science & AI, State of the Industry, Featured Post, Newly Added, Asset Allocation, Hedge Funds

By Rick Roche, CAIA, Little Harbor Advisors, LLC Part 2 of a two-part series on The Alternative Imperative in the COVID Era. In Part 2, the author tackles notorious technology laggards. This piece transitions to alternative data pioneers (Alt-Venturers) and the 4-1-1 on Alt-Data: Hype or Hope? The author dispelsRead More


The Alternative Imperative, Part 1

Oct 6th, 2020 | Filed under: Data Science & AI, State of the Industry, Featured Post, Newly Added, Hedge Funds

By Rick Roche, CAIA, Managing Director of Little Harbor Advisors, LLC Part 1 of a two-part series on Alternative Investment Data (Alt-Data) in the COVID Era. In Part 1, the author makes the case for high-frequency, short-interval Alt-Data while discussing three primary drawbacks of interpreting official economic statistics amid aRead More


CONNECTING THE DOTS WITH AI AND KNOWLEDGE GRAPHS

Sep 20th, 2020 | Filed under: Data Science & AI, State of the Industry, Featured Post, Newly Added

By Mehrzad Mahdavi, PhD, Executive Director, FDP Institute Imagine if your social media posts or articles were generated automatically by AI as if they were authored by you…well, that day is here! The next generation of NLP called “Generative Pre-trained Transformer, third generation”, or GPT-3, was recently released for betaRead More


What If Bob Ross Was a Portfolio Manager?

Sep 14th, 2020 | Filed under: Data Science & AI, State of the Industry, Manager Selection, Newly Added, What About Beta?, Hedge Funds

By Aaron Filbeck, CAIA, CFA, CIPM Associate Director, Content Development at CAIA Association If you’ve ever watched an old Bob Ross video, you’ve probably felt a combination of relaxation and, in many cases, exasperation… “how does he do that so effortlessly?!” While there are rarely “happy accidents” in investing, IRead More


AI, What Have You Done for Me Lately?

Sep 10th, 2020 | Filed under: Data Science & AI, State of the Industry, Access to Alternatives, Featured Post, Newly Added, Asset Allocation, Hedge Funds

By Nicolas Rabener of FactorResearch (@FactorResearch) INVESTING IN AI VERSUS AI INVESTING “AI will probably most likely lead to the end of the world, but in the meantime, there’ll be great companies.” – Sam Altman If investors are looking for that one great AI company that will also end theRead More


Humans are Not Obsolete: We Bring the Razor

Sep 9th, 2020 | Filed under: Data Science & AI, State of the Industry, Access to Alternatives, Featured Post, Newly Added

Artificial intelligence, understood in a broad sense to include Big Data and machine learning, is a vast as-yet unplumbed disruption for portfolio management and trading as for so much else. People are still trying to get a handle on it. These are fields in which there is a great dealRead More


Transparency…Democracy…Liquidity

Aug 2nd, 2020 | Filed under: Data Science & AI, State of the Industry, Access to Alternatives, Featured Post, Newly Added

The structure of financial markets has changed substantially since the 2014 publication of Michael Lewis’ Flash Boys. Much that was shocking and new then is now taken for granted. Also, the world of investments is in a sense more democratic now, with Robinhood transforming the model of retail investing, andRead More


Seeking to Predict Recessions? Focus on the Forest—Not the Trees

Jul 21st, 2020 | Filed under: Data Science & AI, State of the Industry, Featured Post, Newly Added

By Keith Black, PhD, CFA, CAIA, FDP, Managing Director, CAIA Association The FDP Institute recently spoke with Al Yazdani, the chief data scientist and founder of Calcolo Analytics, regarding his forthcoming article in the Journal of Financial Data Science: “Machine Learning Prediction of Recessions: An Imbalanced Classification Approach.” The authorRead More


Technology: Aiding and Abetting the Democratization of Alternative Investments

Jul 14th, 2020 | Filed under: Data Science & AI, State of the Industry, Access to Alternatives, Featured Post, Private Equity, Newly Added, Hedge Funds

A recent working paper for the European Corporate Governance Institute maintains that technology has the potential to make hedge funds and private equity more accessible to the retail investor. The paper, by Omololu Bajulaiye of Tilburg University, along with some other scholars begins with the non-controversial proposition that venture capital,Read More


Changes are coming

Jul 12th, 2020 | Filed under: Data Science & AI, State of the Industry, Access to Alternatives, Featured Post, Newly Added

This article was co-authored by Dr Mehrzad Mahdavi and Hossein Kazemi, Phd, CFA from FDP Institute, and William J. Kelly from CAIA Association Digital transformation, with artificial intelligence and machine learning technologies at its core, has created unprecedented challenges and opportunities across all industries.  The financial sector will be profoundly affected as demonstrated by numerous use casesRead More


Machine Learning Goes Global

Jul 2nd, 2020 | Filed under: Data Science & AI, State of the Industry, Newly Added

A recent test of machine learning in pursuit of alpha finds results similar to what established literature already suggests in looking specifically at the value of algorithms in the US market. But this study then goes global, in a way that most of existing literature on this question has not,Read More


SAVING THE WORLD BY ‘TECHNOLOGIZING’ INSTITUTIONAL INVESTMENT

Jun 21st, 2020 | Filed under: Data Science & AI, State of the Industry, Featured Post, Newly Added, ESG

By Ashby Monk, Executive and Research Director at Global Projects Center, Stanford University & Dane Rook, Research Engineer at Global Projects Center, Stanford University “The world needs institutional investors to save society as we know it.” Say these words to your mother, and she may check your temperature; say them at aRead More


‘HAL, Determine the Fatness of the Tail’

Jun 11th, 2020 | Filed under: Data Science & AI, State of the Industry, Featured Post, Newly Added, Asset Allocation

There has been a lot of commentary in the financial press about the idea of “fat tails,” that is, about the idea that disasters are more common than a normal or bell curve view of probability would lead one to expect. Indeed, one might even say that there is someRead More


Has the Corona Virus Helped to Erode the Hype Around Artificial Intelligence?

Jun 4th, 2020 | Filed under: Data Science & AI, State of the Industry, Featured Post, Newly Added, Asset Allocation

By Dr. Mehrzad Mahdavi, Executive Director, CEO Financial Data Professionals Institute According to a recent WSJ article, (subscription required) many companies have just discovered that AI is not some kind of magic sauce that could be poured over any business process to transform it into a moneymaking machin. The article also points outRead More


Stat Arb, Algos and the Difference Between Cats and Dogs

Jun 1st, 2020 | Filed under: Data Science & AI, State of the Industry, Featured Post, Newly Added, Asset Allocation, Hedge Funds

A co-founder of Quantigic Solutions has presented what he calls “the freshmanlevel” answer to the question: why did dollar-neutral quant trading strategies, such as equities stat arb, fail so markedly during the COVID-19 market sell-off? Zura Kakushadze, a professor at the Free University of Tblisi, is on reasonably solid groundRead More


Diving Deeper into the Deep Learning Pool

May 17th, 2020 | Filed under: Data Science & AI, State of the Industry, Featured Post, Newly Added

Dmitry Borisenko, an independent scholar and a former quantitative analyst at Krauspartner Investment Solutions, posted a complicated article last year with the deceptively simple title, Dissecting Momentum: We Need to Go Deeper. As the title suggests, Borisenko begins with the momentum strategy as a means of reaching alpha. Variables basedRead More


Data Scientists Should Do Drugs!

May 14th, 2020 | Filed under: Data Science & AI, State of the Industry, Newly Added

By Keith Black, PhD, CFA, CAIA, FDP Now that this attention-grabbing headline has drawn you in, let me clarify. Data scientists should not partake in illegal drugs. Data scientists should participate in pharmacological research, as artificial intelligence and machine learning can add value, even when the data scientist does notRead More


Model Risk Management as Algo Trading Expands

May 10th, 2020 | Filed under: Data Science & AI, State of the Industry, Newly Added, Risk Management

The FICC Market Standards Board Ltd. (FMSB) is a London-based standards body for participants in the wholesale fixed income, currencies, and commodities (FICC) markets. It has been looking into the root causes of market misconduct, and pursuant to that research it recently published a report on the “themes and challenges”Read More


Major PE/VC Firms Back New Approaches to Quantum Computing

Apr 23rd, 2020 | Filed under: Data Science & AI, State of the Industry, Featured Post, Private Equity, Newly Added

In October 2019, Google announced quantum supremacy: the creation of a special-purpose computer using quantum processors that could perform a calculation impossible for a digital computer. A computer Google named Sycamore resolved in just three minutes a computational challenge that would have required a digital computer 10,000 years. Remarkable asRead More


The Algorithms that will Find the ESG Tipping Point

Apr 16th, 2020 | Filed under: Data Science & AI, State of the Industry, Featured Post, Newly Added, ESG

A recent literature review conveys the state of scholarly understanding of ESG alpha.It also discusses how machine learning may help alternatives managers to track, and at the right time to pounce upon, a critical tipping point. Joachim Erhardt, a managing director at Landesbank Baden-Württemberg (LBBW) and an independent scholar, startsRead More


Machine Learning, Quant Models, and ESG factors: Who Uses Them and What Data Do They Mine?

Apr 9th, 2020 | Filed under: Data Science & AI, State of the Industry, Newly Added, ESG

Keith Black, PhD, CFA, CAIA, FDP, Managing Director of Content Strategy, CAIA Association CAIA Association and FDP Institute recently had a conversation with Mike Chen and George Mussalli. Dr. Chen is the director of equity investments and Mr. Mussalli is the managing director and CIO of equity investments at PanAgora.Read More


Using Alternative Data and Machine Learning in Alternative Asset Classes

Mar 30th, 2020 | Filed under: Data Science & AI, State of the Industry, Access to Alternatives, Newly Added, Risk Management

Keith Black, PhD, CFA, CAIA, FDP, Managing Director of Content Strategy, CAIA Association Michael Oliver Weinberg and Peter Strikwerda work at the Dutch pension fund APG and serve as the head of hedge funds and alternative alpha and the global head of digital and innovation, respectively. CAIA Association and FDPRead More


Machine learning is not magic—It is just a tool!

Mar 20th, 2020 | Filed under: Data Science & AI, State of the Industry, Newly Added, Asset Allocation

Keith Black, PhD, CFA, CAIA, FDP, Managing Director of Content Strategy, CAIA Association “Building your dream has to start now There’s no other road to take You won’t make a mistake I’ll be guiding you You have to believe we are magic Nothin’ can stand in our way” – OliviaRead More


Artificial Intelligence and the Cambrian Explosion

Mar 17th, 2020 | Filed under: Data Science & AI, State of the Industry, Featured Post, Newly Added, Asset Allocation

Three scholars affiliated with University College London have posted a paper on the dangers that increasingly sophisticated algorithms pose for markets, employing a fascinating analogy from paleontology. But we begin with their big picture. The authors are concerned that in the near future an “ecology of trading algorithms across differentRead More


Are the Robots Really Taking Over?

Mar 5th, 2020 | Filed under: Data Science & AI, State of the Industry, Access to Alternatives, Newly Added, Asset Allocation, Hedge Funds

By Aaron Filbeck, CFA, CAIA, CIPM, Associate Director, Content Development at CAIA Association Excerpted from the Alternative Investment Analyst Review, Volume 8, Issue 3 The Alternative Investment Analyst Review is the official publication of the CAIA Association.  Access to the most current issue is an exclusive benefit of CAIA Membership whileRead More


A Walk Through the Forest with Joe Simonian

Mar 4th, 2020 | Filed under: Data Science & AI, State of the Industry, Newly Added

What Does Machine Learning Have to do with Fama and French? By Keith Black, PhD, CFA, CAIA, FDP, Managing Director, CAIA Association “I went to the woods because I wished to live deliberately, to front only the essential facts of life, and see if I could not learn what itRead More


In the room where it happens: An investigation of the potential of regulatory technology

Feb 26th, 2020 | Filed under: Data Science & AI, State of the Industry, Newly Added

Keith Black, PhD, CFA, CAIA, FDP, Managing Director of Content Strategy at CAIA Association Do you want to be in the room where it happens, when “The Smartest Guys in the Room”* are plotting their fraud and trying to prevent the demise of Enron? Look around at how lucky weRead More


Big Data is a Big Deal

Feb 17th, 2020 | Filed under: Data Science & AI, State of the Industry, Newly Added

By Keith Black, PhD, CFA, CAIA, FDP, Managing Director of Content Strategy, CAIA Association CAIA’s second webinar starring the authors of papers that are required readings for the FDP exam featured Gene Getman, CAIA, a client portfolio manager and product specialist for Lombard Odier Investment Managers. He detailed how LombardRead More


Lessons from CAIS 2020

Feb 11th, 2020 | Filed under: Data Science & AI, State of the Industry, Private Equity, Private Debt, Newly Added, Asset Allocation, ESG, Hedge Funds

John Bowman, CFA, Senior Managing Director at CAIA Association “You’re a kite dancing in a hurricane, Mr. Bond.” (Mr. White to 007, Spectre) Despite the crystal blue island water, softly rolling Caribbean tide, and perfect skies outside the hotel all week, I opened my conference wrap-up panel reminding delegates forRead More


Alternative Data: A Road to Alpha

Feb 2nd, 2020 | Filed under: Data Science & AI, State of the Industry, Access to Alternatives, Featured Post, Real Estate, Private Equity, Newly Added, Asset Allocation, Hedge Funds

Investment management firms are increasingly hard-pressed to hedge away risks, increase alpha, and lower costs: a daunting agenda. One way of going about that is by knowing what is going on in the underlying markets more quickly than the competitors and counterparties do.  To that end: alternative data. Investment firms,Read More


A Conversation with the Institute of Business Ethics

Jan 30th, 2020 | Filed under: Data Science & AI, State of the Industry, Newly Added

By Keith Black, PhD, CFA, CAIA, FDP | Managing Director, Content Strategy at CAIA Association Recently, CAIA Association sat down for a conversation with Guen Donde, the Head of Research for the Institute of Business Ethics (IBE).  Life moves pretty fast in the world of GDPR, big data, and artificialRead More


Taleb: What Size Tail Does the Smart Money Bet On?

Jan 28th, 2020 | Filed under: Data Science & AI, State of the Industry, Featured Post, Newly Added, Asset Allocation, Risk Management

Statistician/philosopher Nassim Nicholas Taleb critiques “behavioral” economics and finance as he looks at the differences between “binary forecasts” and “real world payoffs,” in a recent paper for the International Journal of Forecasting. Much of the argument will be familiar to those who have some acquaintance with Taleb’s work as itRead More


False Positives and Machine Learning

Jan 23rd, 2020 | Filed under: Data Science & AI, State of the Industry, Access to Alternatives, Newly Added, Risk Management, Hedge Funds

There is a high rate of failure among quant funds. These include smart beta, factor investing, statistical arbitrage, and CTAs. Such false positive strategies are a widespread industry problem. Since psychiatrists have long traded on the ability of the human mind to find an elaborate narrative in a random inkRead More


The Dog Days of… print(“Season is”,season)

Jan 6th, 2020 | Filed under: Data Science & AI, State of the Industry, Access to Alternatives, Manager Selection, Asset Allocation, What About Beta?

By Bill Kelly, CEO, CAIA Association As a global organization, it is pleasing to know there is always a CAIA Association Member, somewhere in the world, enjoying the dog days of summer. Although we can’t get Portfolio Management Research to recognize the Southern Hemisphere of seasons on the cover ofRead More


Start Your Algorithms: Speed is Good Again, or is it?

Dec 30th, 2019 | Filed under: Data Science & AI, State of the Industry, Access to Alternatives, Featured Post, Newly Added, Asset Allocation, Hedge Funds

Until the final days of 2019, it has been a quiet year for high-frequency trading-related news. The whole concept of a trade executed in nanoseconds, and the related concept of a trading program managed with only sporadic human intervention or oversight, have all faded into background assumptions. What remains isRead More


High-frequency Trading: More Flash to Come

Dec 29th, 2019 | Filed under: Data Science & AI, State of the Industry, Featured Post, Newly Added, Asset Allocation, Hedge Funds

There has been little “news” about high frequency trading in 2019. On the one hand that silence, as a certain famous detective might say, is “the curious incident.” On the other hand, the period of silence, like the year 2019 itself, may be ending. To get to both points, weRead More


Alternative Investments: Investing By Numbers

Nov 19th, 2019 | Filed under: Data Science & AI, State of the Industry, Access to Alternatives, Featured Post, Real Estate, Private Equity, Private Debt, Newly Added, Risk Management, Hedge Funds, Commodities & Natural Resources

What’s in the future for alternative investments asset management? A new publication from Ernst & Young, London, contends that allocations to alternative investments and are “robust,” but that there is an important shift underway in favor of private equity and at the expense of hedge funds. In 2018, 40% ofRead More


Machine Learning: Beyond the Fear of Unknown Unknowns

Nov 17th, 2019 | Filed under: Data Science & AI, State of the Industry, Featured Post, Newly Added, Asset Allocation, Hedge Funds

Machine learning as a way of managing a portfolio is a “wave of the future” with a lot of sea to cover before it breaks on the shore. Meson Capital Partners has sent its investors an update and summary for 2019 Q3 regarding its managed market neutral fund, and thisRead More


It’s Not Cheating for Market Makers to Pay for Order Flow

Oct 24th, 2019 | Filed under: Data Science & AI, State of the Industry, Featured Post, Newly Added, Asset Allocation, Hedge Funds

Larry Tabb, in a piece in the Financial Times, has defended the controversial practice of payment for order flow (PFOF). Let’s start with PFOF and why it’s controversial. The UK’s Financial Conduct Authority defined PFOF in a recent white paper as the practice in which an investment firm, typically aRead More


AIMA: Looking at the Canadian Landscape

Oct 22nd, 2019 | Filed under: Data Science & AI, State of the Industry, Access to Alternatives, Featured Post, Infrastructure, Newly Added, Hedge Funds, Commodities & Natural Resources

The Alternative Investment Management Association first opened a branch in Canada in 2003. In recent days, AIMA has posted a report on what it calls the “landscape.” It doesn’t mean the Rockies. It means the lay of the land for alternative investments in that country. AIMA’s report looks at aRead More


Past performance guarantees no future results

Oct 17th, 2019 | Filed under: Data Science & AI, State of the Industry, Featured Post, Newly Added, Asset Allocation, Risk Management

Since, as everyone says, “past performance is no guarantee of future results,” a history of close correlation between two assets, or between a single asset and a benchmark, is no guarantee of future correlation. The threat that a correlation upon which a particular investor has relied will cease to applyRead More


When Exchanges are Complements, not Competitors

Sep 26th, 2019 | Filed under: Data Science & AI, State of the Industry, Featured Post, Newly Added, Asset Allocation, Hedge Funds

One regular theme of coverage and analysis that involves the listed equities, including analysis of the pursuit of alpha, is that many of the users of these markets claim, often quite obstreperously, that the exchanges charge more than makes sense and some restructuring of the industry is in order. TheRead More


Climate Change and Artificial Intelligence as Investment Mega-Trends

Sep 24th, 2019 | Filed under: Data Science & AI, Emerging Asset Classes, State of the Industry, Featured Post, Private Equity, Newly Added, Asset Allocation, ESG, Hedge Funds

A report from CREATE in collaboration with BNY Mellon looks at two related megatrends in investing—climate change and artificial intelligence. It asks in each case: how is this trend perceived in terms of opportunities and risks? What are the specific investment issues involved or solutions likely to be adopted? AndRead More