Machines taking over hedge funds.
CNBC reports that a revitalization of the hedge fund industry seems to be more dependent on machines than on humans.
Hedge funds are using computers to detect patterns and alter investment decisions through algorithms. Some hedge funds are sifting through alternative data — or sources not considered traditional in finance like annual reports — to manage their portfolios.
However, the jury is still out as to whether or not these quantitative strategies guarantee returns. Case in point – a recent Barclays report showed that while investors perceive quant strategies outperform those that are less technology-driven, there’s no research that would indicate that is actually the case.
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Will this mean a slight drop risk-wise for hedge funds? A transition to having less sophisticated investors? Just curious Dr. Iris.
Cheers!
Don
As the CNBC articles concludes - the jury is still out.
Computers can definitely do routine tasks faster than humans.
However, for certain types of trades and financial engineering analysis, it is not clear if computers can do such tasks without human guidance.
We shall see. As the CNBC article states, the jury is still out if the machines will do a better job than humans.
However, I think we can all agree that they will definitely be faster than humans.
Yes, Beth, it seems that is where things are headed.
Only problem is what will be left for many humans to do once their jobs are taken over by robots and computers?
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That's very interesting, Iris! Thanks for sharing!
My pleasure!