Research finds: ChatGPT can accurately predict stock trends and is expected to replace analysts in the next few years

News on April 28, a recent study showed that ChatGPT is a highly advanced AI robot that has an amazing ability to predict stock trends with extremely high accuracy. . As such, this has fueled speculation about the possibility of AI models replacing human investment analysts in the coming years.

Professors at the University of Florida conducted some research and found that the performance of this chatbot far exceeded traditional sentiment analysis techniques. "ChatGPT outperformed traditional sentiment analysis methods."

This group of professors believes that integrating advanced language models such as ChatGPT into investment decisions may make predictions more accurate and improve the performance of quantitative trading strategies. This paper has been published on the SSRN public welfare academic platform (IT House attached DOI link http://dx.doi.org/10.2139/ssrn.4412788).

To evaluate ChatGPT’s predictive power, the professors provided more than 50,000 news headlines about specific companies since October 2021. They then asked ChatGPT whether these headlines had a positive, negative, or no impact on the company’s stock price.

Using sentiment analysis, OpenAI designed a unique scoring indicator for ChatGPT, called the "ChatGPT score", and the robot can analyze this score to evaluate its impact on the analyzed company's stock market performance the next day. Ability to predict.

The study found that there is a significant constructive relationship between the ChatGPT score and the stock performance of the selected companies on the next day. The higher the score, the better the return, and the lower the score, the lower the return.

The researchers found that traditional models failed to provide any additional predictive power compared to ChatGPT-based sentiment scores. These results demonstrate that ChatGPT has a deep understanding of stock market patterns, which also presents a potential opportunity for those investors.

In fact, in a recent interview with Fortune magazine, the researchers highlighted the potential transformation that ChatGPT and other similar AI models could bring to different financial sub-industries, namely asset management, stock trading , investment and financial regulation. While the chatbot failed to realize the negative impact of executives selling stocks, researchers remain optimistic about the future of artificial intelligence in the financial industry.

Of course, although ChatGPT and other high-level language models have strong prospects in predicting the stock market, there may still be many surprises at present, such as failing to provide expected accuracy and help, and it may also bring come with serious risks.

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