Mitsubishi’s FX subsidiary Kabu.com to launch AI-powered stock fund

Maria Nikolova

The fund, nicknamed “Deep AI”, will harness AI deep learning capabilities to pick stocks.

Online trading companies are showing increased interest in the area of artificial intelligence (AI), with Japan being at the front of these developments. Kabu.com Securities, a Forex subsidiary of Mitsubishi UFJ Financial Group Inc (TYO:8306), today announced that it is about to offer a stock fund using AI capabilities.

The launch of the new stock fund, nicknamed “Deep AI” is scheduled for October 10, 2017. As the name of the fund suggests it will harness the deep learning powers of AI technology to pick stocks. Human qualitative analysis will also be in use, thanks to Tokyo-based company Asset Management One.

The new offering underlines the advancement of AI in the area of trading. Computers are increasingly taking over investments of a month to a year and are now doing better for investments spanning two to three years, where human-devised strategies used to have an edge, according to data from Nomura Research Institute Ltd (TYO:4307). The last hope for human staff seems to be the time horizon of five years or longer.

Kabu.com has already shown its determination to use AI in the area of stock trading. In May this year, the broker introduced “AlpacaSearch for kabu.com”, a solution developed in collaboration with AI startup AlpacaDB Inc. The AI system scans the share prices of Japan-listed companies in order to identify shares showing similar trends. The AI technology detects correlations that human traders cannot notice and, after that, signals trading opportunities. In addition, this solution detects overvalued and undervalued stocks by identifying correlating stock charts. These findings are then used for a trading strategy where investors go long on the underperforming shares and go short on the overperforming shares in a correlated pair.

And in July this year, Kabu.com announced a partnership with xenodata lab to deliver another offering based on AI technologies to its clients. The service, called “xenoFlash for kabu.com”, automatically analyzes the financial results of listed companies, based on a natural language processing mechanism. Based on this analysis, an infographic with the highlights is delivered. The “flash” part of the service name means that the analysis is made at high speed – it should take no more than a minute. In the beginning, the service will cover 2,300 companies.

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