Morgan Stanley now has a deep learning and artificial intelligence model to analyst sentiment in brokerge reports. And it's beating the market.
Morgan Stanley's new model generates a score based on how certain the program is that the analyst is positive or negative on the stock.
For each of the brokerage's 41,758 company research reports from January 2013 to May 2019, Morgan Stanley's model produces a score reflecting how confident the artificial intelligence was that the analyst was bullish or bearish on the stock. "Overlaying revised price targets helped us focus on critical market-moving events, while providing a sufficient number of opportunities for entering trades," Huang added.
Analysts can often reveal their true feelings toward a stock simply though their choice of words and Morgan Stanley's work now offers proof. Phrases like "great things," "definitely a plus" and "much better" can be read and loosely understood as nearly always positive by a deep learning platform. And that, in turn, can be leveraged, Huang wrote.to illustrate his point.
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