Part II. Finance and Machine Learning
If there is one industry that would greatly benefit from the genuine adoption of artificial intelligence, it is investment management.
Angelo Calvello (2020)
This part consists of four chapters. It covers topics central to the understanding of why data-driven finance, artificial intelligence, and machine learning will have a lasting impact on financial theory and practice.
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Chapter 3 sets the stage with important and popular financial theories and models that have been considered cornerstones of finance for decades. It covers, among others, mean-variance portfolio (MVP) theory and the capital asset pricing model (CAPM).
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Chapter 4 discusses how the programmatic availability of ever more historical and real-time financial data has reshaped finance from a theory-driven to a data-driven discipline.
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Chapter 5 is about machine learning as a general approach, abstracting from specific algorithms to a large extent.
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Chapter 6 discusses on a general level how the emergence of data-driven finance in combination with artificial intelligence and machine learning leads to a paradigm shift in finance.
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