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Edinburgh UK Thurs 27 June: Can equity analysts be replaced by machine learning?

June 27 @ 6:00 pm - 8:00 pm

| Free

Thu, 27 June 2019, 18:00 – 21:00 BST

Lulu, 125b George St, Edinburgh, EH2 4JN, United Kingdom

Can equity analysts be replaced by machine learning or is a combined approach optimal?

Presented by: Alistair Haig 

Time: doors opening at 6pm with the presentation starting at 6.15pm Sharpe

Cost: Free (drinks and canapés sponsored by Northfield and Axioma)

Abstract

Machine learning (ML) is now being used to perform investment analysis. We evaluate the relative effectiveness of valuations made by analysts and a machine learning algorithm. Analysts in our global sample are independent of brokerage incentives and collectively make unbiased valuations using a standardised discounted cash flow model. Neither analyst not ML valuations serve as viable predictors of subsequent returns when used alone. In combination they offer credible predictive power which can be increased by adding a price momentum factor. Analyst and ML valuations could be improved by placing greater emphasis on past returns.

Alistair Haig – University of Edinburgh Business School

Alistair started his career at an investment technology firm in the 1990s then moved to buy-side and sell-side investment research. He now teaches practice-based courses in finance and investment at the University of Edinburgh Business School.

His research is driven by questions from practice with a focus on regulatory, institutional and technological change in investment analysis. His current projects examine the use of machine learning in investment analysis. Alistair’s paper can be found at: http://ssrn.com/author=2062896

Venue

Lulu
125b George St
Lulu, 125b George St, Edinburgh, Scotland EH2 4JN United Kingdom
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