It seems like everyone is musing about what an A.I.-powered future could hold, from “Shazam for scents” to humanoid robotic personal assistants. Yet can ChatGPT finally do what legions of investors have historically tried and have failed to do—beat the market?
According to researchers at the University of Florida, Alejandro Lopez-Lira and Yuehua Tang, the answer is yes. In their paper Can ChatGPT Forecast Stock Price Movements? Return Predictability and Large Language Models, they found that ChatGPT outperformed today’s analysis methods in predicting stock market sentiment for a specific company based on news headlines. “Our results suggest that incorporating advanced language models into the investment decision-making process can yield more accurate predictions and enhance the performance of quantitative trading strategies,” they wrote in the study.
