This week’s issue is guest edited by one of our index providers, Axyon AI. Based in Italy, Axyon AI is a fintech company with a mission to bring AI-powered predictive value to the investment management industry. Using C8 Studio, the performance of Axyon AI’s equity indices are then compared with classic market-cap weighted benchmarks.

No, that is not AI  

In recent years, Artificial Intelligence (AI) has become a popular buzzword in the investment management industry. Especially since the pandemic, uncertainty and underperformance led many managers to look for enhanced information sources to improve their investment process. While this has sparked enormous interest in the adoption of advanced AI-powered predictive solutions, at the same time it has led the ‘AI’ keyword to be excessively used (and abused) for marketing and positioning purposes.

The harsh reality is that AI is way more than a buzzword, and calling a system “AI-powered” doesn’t really make it brighter. Integrating a robust AI-powered alpha discovery source into the investment process is a complex task. It is not just funding an AI internship or partnering with a well-known university; even creating an entire AI team implies waiting a long time for proven results (in addition to substantial investment in people and technology). And even if this is successful, well, market dynamics may change and send a specific AI-powered model awry.

Our work at Axyon AI, which started in 2015, has always been focused on looking at asset performance prediction from a learning perspective rather than a knowledge one. This means recognising that financial markets are probably one of the most complex systems created by humans and, peculiarly, one whose rules are changing every day by responding to enormously ramified behaviour and changing patterns.

That is why we do not focus on developing one specific model. Our core efforts revolve around developing auto-ML technology capable of constantly adapting to ever-changing market conditions, and being able to integrate its predictions into fully-systematic indices. This allows clients and investors to add AI-powered alpha layers to their investment portfolios, while retaining complete control of risk, and it is made incredibly easy by the integration of Axyon AI’s indices into the C8 Studio platform.

Axyon AI on C8 Studio 

The strength of Axyon’s investment allocation process can be best illustrated by using C8 Studio to compare their long-only AI-driven equity indices to classic market-cap weighted benchmarks, using the ‘Screening’ function: 

US Equity Indices Compared 

Euro Equity Indices Compared

World Equity Indices Compared

 

Other posts

NDR Dynamic Allocation Strategy January 2025 Update

BY BRIAN SANBORN
Dynamic Allocation Strategy, indicators, weightings update Read more →

C8 Currency Compass – USD Correction II – February 2025

BY JON WEBB
Our FX systems started the year with ashort USD bias (against the general consensus for a stronger USD). For the first three weeks this bias worked well as fears of blanket US tariffs did not materialize, however, in the final week of January, tariffs were announced on Mexico, Canada and China leading to some renewed USD strength. Nevertheless, so far, the measures that have been taken (with some already suspended for now) have not been as bad as feared. Looking forward to this month, we note the signals are more mixed for the USD though our hedge ratios remain negative USD for the largest currencies: EUR, GBP and JPY. Read more →

C8 Hedge on The Full FX

BY JON WEBB
Mattias Eriksson and Jon Webb join host Colin Lambert to discuss the launch of C8 Hedge Read more →
Back to all posts →