The financial trading community had thrown its proverbial hands in the air at the idea of being able to reliably predict movements in stock prices. Both manual approaches combining Financial Algorithms and Charts with Human Intelligence; and automated approaches using AI / ML (Artificial Intelligence and/or Machine Learning) or Financial Algorithms have failed to consistently deliver above average market results.
However, Semantic Brain has demonstrated a revolutionary architecture that delivers accurate predictions; and is continuing to enhance its ability to help Investors better manage their trades and portfolios. We are able to achieve these breakthrough results by uniquely integrating Financial Algos, AI / ML, Charts and Human Intelligence. We are harnessing the power of Deep Learning, Parallel Processing and GPUs to substantially improve accuracy while reducing costs and increasing performance.
This weekly journal is authored with the intention of sharing our journey, our accomplishments and industry trends / innovations.
Semantic Brain: August 23 to 29, 2021
Future Top Movers - 100% Precision
We launched the Future Top Movers functionality (which identifies stocks that are expected to move more than 5% within five(5) trading days / one(1) week) into production on August 16, 2021. During the first weeks in production our Future Top Movers functionality has delivered 100% Precision.
100% of RUSSELL 2000 (Small Cap) Future Top Movers price changed more than 5%
All but 2 RUSSELL 2000 (Small Cap) Future Top Movers prices changed more than 10%
100% of RUSSELL 1000 (Large Cap) Future Top Movers price changed more than 5%
2 RUSSELL 1000 (Small Cap) Future Top Movers prices changed more than 10%
Future Top Movers colour coded for relative confidence
Intraday charts enable human decision making, and Semantic Brain AI will make intraday predictions.
Why Predicting Top Movers Matters!
Technical Reasons & Human Factors
Future Top Movers is good starting point humans and AI.
Generate Short List for Humans: By identifying a list of Future Top Movers and providing users context Semantic Brain's AI enables investors and traders to focus on key stocks; increasing their productivity and return.
Efficient & Accurate AI Forecasts: AI can utilize Future Top Mover analysis to more accurately predict direction and momentum shifts.
Business Reasons & Use Cases
Identifying Top Movers has direct business benefits.
Identify Risk: Significant price changes identify risk.
Trade Options: Option strategies such long straddle can yield a profit based on significant price changes even when direction is uncertain.
Semantic Brain: Future Efforts
Semantic Brain is embarking on a long-term journey to "Augment Financial Intelligence", and aspires to eventually augment multiple forms intelligence. We believe that the following near-term agile R&D pipeline will help our customers achieve superior results.
Likely Movers: This is a new feature that helps users analyze their current holdings / portfolios and watchlist. We expect a lower precision, however, this is expected to deliver more information and insight.
Directional & Momentum Predictions: Deliver accurate predictions on direction of stock price change using momentum and directional indicators. Semantic Brain is working on improving the accuracy of these models, and we are planning to release this into production in September.
Broader Scans: Scan more markets and equities to identify better and more investment opportunities
There are 53K global equities, our coverage is currently limited to 3000 US equities
Real-time Alerts: Alerts users on historical anomalies and deviations in real-time.
Intraday Predictions: Semantic Brain's predictions presently use Daily Data. We plan to collect data every 30 mins (and subsequently 5 mins) to make more frequent and accurate predictions.
Expand Financial Instrument Coverage: Predict price changes for Crypto, Commodities and Currency Pairs.
AI & Cyborg Journey
Semantic Brain relies on a number of technologies (e.g. Predictive Analytics, Explainable AI, Chatbots) and enabling platforms (e.g. Large Multi-screen Platforms, AR/VR in future). We tie these technologies and platforms together to create Human and AI feedback loops which result in Superior Intelligence that is greater than Human or AI.
This section is dedicated to highlighting some of the above industry trends and innovations. We plan to eventually use Semantic Brain's Frameworks and Solutions developed for investing / finance in many other areas (e.g. marketing, medicine). Sharing our thoughts on industry trends and innovations is also our way of supporting and encouraging the community.
Top 5 GPT-3 Successors
Semantic Brain investigated the potential of using GPT-3 to enable our App users to prompt our AI perform the necessary Financial Analysis.
In terms of text generation and applications GPT-3 was a quantitative and qualitative leap forward.
"GPT-3 has demonstrated crazy language generation abilities. It can have conversations (impersonating historical figures, alive or dead), write poetry, songs, fiction, and essays. It canwrite code, music sheets, and LaTeX-formatted equations. It shows a modest level of reasoning, logic, and common sense. And it can ponder about the future, the meaning of life and itself."
A detailed analysis by Alberto Romero on potential successors to GPT-3 can be found here -
4 Things GPT-4 Will Improve From GPT-3
If GPT-4 is delivered then it is bound to improve GPT-3. Some potential areas are identified below
GPT-4 will have more parameters, and it’ll be trained with more data to make it qualitatively more powerful.
GPT-4 will be better at multitasking in few-shot settings. Its performance in these settings will be closer to that of humans.
GPT-4 will depend less on good prompting. It will be more robust to human-made errors.
GPT-4 will avoid the limitations of early transformer architectures. The context window will be larger, allowing the system to perform more complex tasks.
An analysis by Alberto Romero on this topic can be found at - https://towardsdatascience.com/4-things-gpt-4-will-improve-from-gpt-3-2b1e7a6da49f