Morningstar Uses Machine Learning In Research

Research provider Morningstar recently introduced a quantitative equity rating generated by a machine learning statistical model that tries to replicate the results produced by a human analyst. Lee Davidson, ‎head of quantitative research, and Zurab Margvelashvili, a quantitative performance analyst, wrote in the August/September 2016 issue of Morningstar magazine that the firm has approximately 120 equity and credit analysts, who cover about 1,700 equities, and produce a Morningstar Rating for Stocks. “To complement our analysts’ work and extend the coverage universe, Morningstar recently introduced the Morningstar Quantitative Equity Rating – a forward-looking measure that is generated by a machine learning statistical model that attempts to produce ratings and statistics that would have been produced by Morningstar analysts,” said the article. The machine learning algorithm, called random forest, has increased Morningstar’s…


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