Last year's top-performing hedge fund is a little-known commodity trading advisor that has made a killing betting on the price of oil. Artificial intelligence models were successfully used to predict the price of oil and the stock market, making the firm's traders some of the most successful in the world.
The firm, Finéon Capital, is a UK-based hedge fund that manages $25 billion in assets. It is run by Doris Small, a former physicist who founded the firm in 1987. Finéon Capital has been using artificial intelligence to predict the price of oil and the stock market for years. The firm's AI models have been so successful that it has become the top-performing hedge fund in the world this year.
Finéon Capital is up more than 40% this year, according to the Financial Times.The firm's AI models are based on the work of a former hedge fund manager named Johannes Ullbridge, who is now a member of the asset allocation team at Finéon Capital. In 2015, Ullbridge published an academic paper that showed how artificial intelligence could be used to predict oil prices and stock market returns.
The model was able to accurately predict both over long periods of time with high degrees of accuracy. Finéon Capital's AI models have been using Ullbridge's work to predict the price of oil and stock market returns for years.Trading on oil futures is extremely risky, and only a few firms engage in it.
To combat the high risks involved with trading oil futures, Finéon Capital's AI models are used to determine whether or not an investment will be profitable before a trade takes place. When a firm uses artificial intelligence to predict price movements of assets that can fluctuate wildly based on geopolitical events and other factors outside of market trends, it can be incredibly accurate. It's hard to predict where the price of oil will go next week, but it's much easier to make a guess based on the fundamental supply and demand factors in place for this year and last year.