Will we soon favor artificial intelligence for betting on the stock market? ChatGPT’s predictions of the impact of news on stock market prices would be more effective than current methods, according to a study published on April 10 and picked up by the Insider site.
More effective than traditional methods.
Two University of Florida finance professors analyzed more than 50,000 company headlines published since October 2021. For each, they asked ChatGPT whether this information was good, bad, or would have no impact on the company’s stock price. These companies.
The “feel” of the AI, expressed as a score, was then compared to the next day’s course. Result: The researchers observed a correlation: if they scored high, companies generally made better returns than if they scored low.
Importantly, this solution outperformed “traditional sentiment analysis methods” that predict price action by analyzing news headlines and social media, although the researchers did not test all of them.
Black spots
However, the researchers caution that investors should “be careful not to rely solely on ChatGPT or similar AI models.”
In fact, ChatGPT has several disadvantages in predicting market prices. First, you are not connected to the Internet and therefore cannot benefit from the latest information in real time. The chatbot was not updated beyond September 2021 and the end of its training.
Finally, ChatGPT still shows difficulties in processing long texts and large amounts of digital data, such as company accounts.
Source: BFM TV
