Sun, Feb 21, 2016 - Page 14 News List

Japanese robot beats humans at market forecasts

By Tom Redmond and Toshiro Hasegawa  /  Bloomberg

This is “definitely something extremely new,” Sakurai said. “As far as I know, thinking up something like this and actually using it for forecasting hasn’t happened before.”

The technique can be applied to other areas. Predicting interest rate moves is not hard, while currency rates sit at the other end of the spectrum, Senoguchi said.

Stocks are “fairly difficult,” but US equities would be easier because of the data available and lower volatility, he said.

Senoguchi’s model did not foresee Japanese shares’ worst start to a year on record. Its prediction for the period ended Jan. 10 was for the Nikkei 225 to advance. It was not alone: Almost half the forecasters in a Nikkei survey saw their predicted lows for this year breached on the first day.

Still, Senoguchi says his machine will get back on track.

“Sometimes the structure of the market changes greatly,” he said. “The ability to change the model when this happens is a big difference from previous approaches.”

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