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AI Forecast: Efficient Forecasting Segments of the Financial Market by AI

This article was written by Sergey Okun – Senior Financial Analyst, I Know First, Ph.D. in Economics.

Utilizing a Machine Learning approach to analyze financial data, enabling the identification of patterns at a level inaccessible to humans.
All financial assets, to varying degrees (with the exception of VIX, the volatility index), exhibit long-term patterns, allowing for the application of machine learning methods.
Corporate 5-10 years bonds and crude oil are potentially the most predictable financial market segments.

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This article was written by Sergey Okun – Senior Financial Analyst, I Know First, Ph.D. in Economics.

Gold, short-term treasury bills, long-term treasury bonds, the spread between the long-term treasury and corporate bonds, 5-month volatility, and 1-month volatility are uncorrelated or negatively correlated with the S&P500 making them good candidates for a role of a hedge asset.
5-month and 1-month volatility as exchange trade products, and also the short-term government bills and long-term government bonds able to play a role of a safe haven asset.
Correlation analysis of the S&P500 and TNX shows that the correlation structure is not consistent from data frame to data frame.