ChatGPT Can Predict Stock Market Moves? New Study Shows ChatGPT Surprisingly Accurate in Predicting Stock Moves And Could Even Replace Investment Analysts | Canada News Media
ChatGPT Can Predict Stock Market Moves? New Study Shows ChatGPT Surprisingly Accurate in Predicting Stock Moves And Could Even Replace Investment Analysts
A new study conducted by finance professors from the University of Florida shows the potential value of ChatGPT in predicting stock market movements.
In the study, over 50,000 news headlines about companies dating back to October 2021 were fed to the chatbot, which evaluated whether the news was good, bad or irrelevant to the company’s stock prices. Using sentiment analysis, the chatbot generated a “ChatGPT score,” which was then analyzed to determine whether it was predictive of the companies’ stock market performance the following day.
The study found a significant positive correlation between the ChatGPT scores and the next-day stock performance for the analyzed companies. Companies with higher scores tended to have better returns than those with lower scores. ChatGPT outperformed traditional sentiment analysis methods that also used data from headlines and social media to predict stock movements.
The researchers concluded that incorporating advanced language models such as ChatGPT into investment decision-making processes can lead to more accurate predictions and enhance the performance of quantitative trading strategies. The study demonstrated that traditional models did not provide any additional predictive power over ChatGPT-derived sentiment scores. These findings suggest that ChatGPT may hold promise for investors seeking to anticipate future stock market movements.
While the potential use case for ChatGPT and other advanced language models in predicting stock market returns is promising, there are apprehensions in the market regarding the risks it could pose if it does not provide the expected accuracy and assistance. Despite this caution, Bloomberg recently released a new GPT-based language model called BloombergGPT, which is trained on a dataset consisting of English-language financial documents, news, filings, press releases and social media. The company claims that this new model will improve existing natural language processing tasks such as sentiment analysis, news classification, headline generation, question-answering and other query-related tasks.
Bloomberg isn’t the only company innovating. Businesses around the globe are desperate to integrate AI into their existing business models, but supply is scarce. That’s why GenesisAI is building a marketplace made to help any business integrate AI into their existing model, and it’s raising millions from retail investors to make it happen.
Jim Simons of Renaissance Technologies was a pioneer decades ago in using machine learning to create algorithms that allowed computers to make investment decisions using past data with minimal human input. But these firms have not fully transitioned to automated operations using cutting-edge artificial intelligence (AI) methods such as self-learning or reinforcement learning. Instead, they continue to rely on advanced statistics and a “theory-first” approach.
Regardless of any concerns, the use of AI in the financial industry is rapidly growing and could become a real game-changer in the industry.
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.
The S&P/TSX composite index was up 0.05 of a point at 24,224.95.
In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.
The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.
The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.
The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.
This report by The Canadian Press was first published Oct. 10, 2024.
