Volt Capital Management AB, a Swedish hedge fund, outperformed its expectations by 14% return on the investment with the help of artificial intelligence. The company has around $30 million under management, which often invests in the short term. The company managed to achieve a 24% return on their investment this year.
The company claims that it could manage more than expected return on investment due to the use of artificial intelligence. During the COVID-19 pandemic, it is difficult to make predictions due to higher volatility in the market. But, with the combination of traditional economic models and artificial intelligence, the organisation managed to precisely predict the trends like the decrease in demand, oil price crash and currency appreciation of various countries.
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This provided an edge to the company as it devised its strategies based on the outcomes of machine learning models. The company had over 200 economic models for making predictions, which can cause analysis of paralysis for a human as different models can point to different outcomes. However, with the help of artificial intelligence, the company was able to make a definite decision as the model automatically applied the right weightage for delivering precise results.
Technical trading has been used for years for trading/investing, but often people get confused as one model’s result conflicts with the other. Thus, it is mostly left for the investors to decide based on the variables he/she envision to have the greatest impact. However, this might result in unexpected results and in turn, a negative return on investment. Consequently, the company leveraged artificial intelligence and moved away from the traditional approach, which to the firm’s, surprise gave a higher return. What makes this special is that the machine learning model delivered accurate results during the uncertain times caused by COVID-19.