Japan’s Kabu.com to launch AI solution for trading stocks

Maria Nikolova

The service, named “AlpacaSearch for kabu.com” is developed jointly with U.S. AI startup AlpacaDB Inc.

Japan has just reiterated its leadership when it comes to the adoption of new technologies, and artificial intelligence (AI) solutions, in particular.

Today, online brokerage Kabu.com Securities, a subsidiary of Mitsubishi UFJ Financial Group Inc (TYO:8306), announced that it will launch a special AI-powered solution for its clients.

The tool, named “AlpacaSearch for kabu.com” is developed jointly with AI startup AlpacaDB Inc, and is set to launch on May 11, 2017. The solution will be available to stock traders using Kabu Station Premium.

The AI system will scan the share prices of Japan-listed companies in order to identify shares exhibiting similar trends. The AI technology is set to detect correlations that human traders cannot usually notice and thus signal trading opportunities. In addition, the new product will detect overvalued and undervalued stocks by identifying correlating stock charts. These findings are used for a trading strategy where investors go long on the underperforming shares and go short on the overperforming shares in a correlated pair.

AlpacaDB, Inc has offices in San Mateo, United States, and Tokyo, Japan. The company is a fintech start-up that brings AI solutions to the world of online trading. Its two main solutions are AlpacaScan and AlpacaAlgo, aiming to facilitate trading by automatically detecting trading opportunities based on past performance and one’s preferences.

The adoption of AlpacaDB’s AI solution by a Japanese company is barely surprising, given that AI has been trendy in Japan’s financial services sector for quite some time. A recent example of such adoption comes from Japan’s Fukoku Mutual Life Insurance, which early this year announced plans to implement IBM’s Watson Explorer Artificial Intelligence system thus making 34 of its employees redundant. In February this year, Japan Exchange Regulation (JPX-R) and Tokyo Stock Exchange, Inc. (TSE) announced they were working on applying AI to market surveillance operations by using technologies developed by NEC Corp (TYO:6701) and Hitachi, Ltd. (TYO:6501), with tests showing that AI solutions were highly precise in identifying the possibility of unfair trading and enabling prevention of such abusive practices.

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