Can Machines “Learn” Finance?

Volume 18, No. 2, 2020

Ronen Israel, Bryan Kelly and Tobias Moskowitz

Machine learning for asset management faces a unique set of challenges that differ markedly from other domains where machine learning has excelled. Understanding these differences is critical for developing impactful approaches and realistic expectations for machine learning in asset management. We discuss a variety of beneficial use cases and potential pitfalls, and emphasize the importance of economic theory and human expertise for achieving success through financial machine learning.