Can Chatgpt Improve Investment Decision? From a Portfolio Management Perspective

Ko, Hyungjin; Lee, Jae‐Wook

doi:10.2139/ssrn.4390529

Cited by 10 publications

(3 citation statements)

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“…GAI has the potential to impact investment management through data analysis, risk assessment, and decision-making (Ko and Lee 2023). By employing sophisticated algorithms to process vast amounts of financial data, GAI could identify patterns, predict market trends, and uncover investment prospects.…”

Section: Case Study #3 | Financial Services (Investment Management)mentioning

confidence: 99%

The GenAI is out of the bottle: generative artificial intelligence from a business model innovation perspective

Kanbach,

Heiduk,

Blueher

et al. 2023

Rev Manag Sci

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The introduction of ChatGPT in November 2022 by OpenAI has stimulated substantial discourse on the implementation of artificial intelligence (AI) in various domains such as academia, business, and society at large. Although AI has been utilized in numerous areas for several years, the emergence of generative AI (GAI) applications such as ChatGPT, Jasper, or DALL-E are considered a breakthrough for the acceleration of AI technology due to their ease of use, intuitive interface, and performance. With GAI, it is possible to create a variety of content such as texts, images, audio, code, and even videos. This creates a variety of implications for businesses requiring a deeper examination, including an influence on business model innovation (BMI). Therefore, this study provides a BMI perspective on GAI with two primary contributions: (1) The development of six comprehensive propositions outlining the impact of GAI on businesses, and (2) the discussion of three industry examples, specifically software engineering, healthcare, and financial services. This study employs a qualitative content analysis using a scoping review methodology, drawing from a wide-ranging sample of 513 data points. These include academic publications, company reports, and public information such as press releases, news articles, interviews, and podcasts. The study thus contributes to the growing academic discourse in management research concerning AI's potential impact and offers practical insights into how to utilize this technology to develop new or improve existing business models.

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Section: Case Study #3 | Financial Services (Investment Management)mentioning

confidence: 99%

The GenAI is out of the bottle: generative artificial intelligence from a business model innovation perspective

Kanbach,

Heiduk,

Blueher

et al. 2023

Rev Manag Sci

View full text Add to dashboard Cite

show abstract

“…Cowen and Tabarrok (2023) demonstrate how ChatGPT can be used within the context of economic teaching pedagogy, whilst assisting with research, idea generation and assessments. Ko and Lee (2023) examine the efficacy of ChatGPT in aiding portfolio management with regard to asset allocation and diversification. They find that ChatGPT's selections are statistically significantly better in terms of diversity index than randomly selected assets, suggesting that LLMs can mimic the decisions of portfolio managers.…”

Section: Introductionmentioning

confidence: 99%

Can ChatGPT Predict Future Interest Rate Decisions?

Woodhouse,

Charlesworth

2023

SSRN Journal

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“…These models, based on the transformative architecture of generative AI, can generate detailed, contextually coherent outputs by analyzing massive text datasets, and have demonstrated impressive capabilities in tasks ranging from creative writing to complex problem-solving. The use of these models, ChatGPT in particular, for selection of investment strategies or "stock picking" has drawn significant attention [2,3,4,8,9,14] since the launch of ChatGPT in November 2022 and especially , its more advanced successor, in mid-March 2023. Other LLMs available at the time of writing this paper, such as Bard from Google or Claude 2 from Anthropic, may be considered as alternatives to GPT models from OpenAI.However, the question of how effective ChatGPT might be in selecting financial assets, such as stocks, for investing, remains open.…”

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confidence: 99%

ChatGPT-based Investment Portfolio Selection

Romanko,

Narayan,

Kwon

2023

Preprint

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In this paper, we explore potential uses of generative AI models, such as ChatGPT, for investment portfolio selection. Trusting investment advice from Generative Pre-Trained Transformer (GPT) models is a challenge due to model "hallucinations", necessitating careful verification and validation of the output. Therefore, we take an alternative approach. We use ChatGPT to obtain a universe of stocks from S&P500 market index that are potentially attractive for investing. Subsequently, we compared various portfolio optimization strategies that utilized this AI-generated trading universe, evaluating those against quantitative portfolio optimization models as well as comparing to some of the popular investment funds. Our findings indicate that ChatGPT is effective in stock selection but may not perform as well in assigning optimal weights to stocks within the portfolio. But when stocks selection by ChatGPT is combined with established portfolio optimization models, we achieve even better results. By blending strengths of AI-generated stock selection with advanced quantitative optimization techniques, we observed the potential for more robust and favorable investment outcomes, suggesting a hybrid approach for more effective and reliable investment decision-making in the future.

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Can Chatgpt Improve Investment Decision? From a Portfolio Management Perspective

Cited by 10 publications

References 0 publications

The GenAI is out of the bottle: generative artificial intelligence from a business model innovation perspective

The GenAI is out of the bottle: generative artificial intelligence from a business model innovation perspective

Can ChatGPT Predict Future Interest Rate Decisions?

ChatGPT-based Investment Portfolio Selection

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