Will AI-Powered Hedge Funds Outsmart the Market?

Every day computers make many millions of electronic trades by performing delicate calculations aimed at eking out a tiny edge in terms of speed or efficiency. Increasingly, however, more significant trading decisions are being made by smarter, more autonomous algorithms. Both established trading firms and a handful of startups are exploring whether such trading techniques borrowed from the field of artificial intelligence could help them outfox other traders. And anyone with money invested might well be curious to know if the trend could alter the dynamics of markets. Quantitative hedge funds, including Bridgewater Associates, Renaissance Technologies, D.E. Shaw, and Two Sigma, have, of course, been using advanced algorithmic approaches for some years. Many of the methods employed by these businesses are found in areas of artificial intelligence research. But the…


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