This article was written by Sergey Okun – Senior Financial Analyst, I Know First, Ph.D. in Economics.
Summary:
Utilizing a Machine Learning approach to analyze financial data, enabling the identification of patterns at a level inaccessible to humans.
All financial assets, to varying degrees (with the exception of VIX, the volatility index), exhibit long-term patterns, allowing for the application of machine learning methods.
Corporate 5-10 years bonds and crude oil are potentially the most predictable financial market segments.
Every six months we issue a one-time forecast for half a year. The report includes our recommendations for a broad range of financial assets for a period of 6 months ahead: Recommended Stocks for US market; European market; ETFs; Commodities market; Currency and Cryptocurrency markets.
At the end of the previous year (2020) the artificial intelligence algorithm located the most recommended stocks for the first half of 2021 in the capital market. The properties were marked by the prediction algorithm according to the signal and predictability. Signal – represents the
In this stock market forecast evaluation report, we will examine the performance of the forecasts generated by the I Know First AI Algorithm for the S&P 500 stocks for long and short positions which were sent daily to our customers. Our analysis covers the period from October 9, 2018, to July 19th, 2020 and further analyzes the performance of the S&P stocks predictions for long and short positions and only long position.
Chart 1: Performance comparison for Top 20, Top 10 and Top 5 signals by Daily Model for only long position vs. S&P 500 for short-term horizons from October 9, 2018, until July 19th, 2020.
Chart 2: Performance comparison for Top 20, Top 10 and Top 5 signals by Daily Model for only long position vs. S&P 500 for long-term horizons from October 9, 2018, until July 19th, 2020.
Chart 3: Performance comparison for Top 20, Top 10 and Top 5 signals by Daily Model for long & short positions vs S&P 500 for short-term horizons from October 9, 2018, until July 19th, 2020
Chart 4: Performance comparison for Top 20, Top 10 and Top 5 signals by Daily Model for long & short positions vs S&P 500 for long term horizons from October 9, 2018, until July 19th, 2020.
S&P 500 Stocks Highlights
In the short term horizons, all groups' signals outperformed the S&P 500.
Our highest signals tend to have the largest returns over short term time horizons and over year long periods.
Only long positions had higher returns than the Long and Short for each time horizon.
Every signal group across every time horizon gave a hit ratio over 53%, showing consistent and reliable accuracy.
Our top-5 signals had returns of 12.80% (Long Only) and 11.49% (Long and Short) over year long periods, handily beating the S&P 500 index.
Rio Tinto was a top 10 stock pick recommended to I Know First subscribers on June 14th for the 1-month time horizon. RIO had a strong signal of 59.58 and a predictability of 0.18. As predicted, TSLA surged 7.95%.
Rio Tinto plc (Rio Tinto) is an international mining company. Rio Tinto's business is finding, mining, and processing mineral resources. Major products are aluminium, copper, diamonds, gold, industrial minerals (borates, titanium dioxide and salt), iron ore, thermal and metallurgical coal and uranium. The Company has activities worldwide and is represented in Australia and North America with businesses in Asia, Europe, Africa and South America.
Before making any trading decisions, consult the latest forecast as the algorithm constantly updates predictions daily. While the algorithm can be used for intra-day trading the predictability tends to become stronger with forecasts over longer time-horizons such as the 1-month, 3-month and 1-year forecasts.
I Know First-Daily Market Forecast, does not provide personal investment or financial advice to individuals, or act as personal financial, legal, or institutional investment advisors, or individually advocate the purchase or sale of any security or investment or the use of any particular financial strategy. All investing, stock forecasts and investment strategies include the risk of loss for some or even all of your capital. Before pursuing any financial strategies discussed on this website, you should always consult with a licensed financial advisor.
