A study found that ChatGPT, an AI chatbot, can analyze news headlines and provide trading signals based on the sentiment and impact of the news on stocks.
The researchers from the University of Florida found that ChatGPT could analyze business news articles from late 2021 and provide trading signals based on whether the headlines were positive or negative for the stocks.
The study found a statistical association between ChatGPT’s comments and future stock movements, indicating that the AI tool understood the news’s consequences.
This is not the first time that ChatGPT has impressed with its capabilities. The chatbot, trained on millions of Reddit postings, has passed examinations, written essays, even threatened some jobs.
It is also one of the latest examples of how AI can use text data from various sources, such as news articles, tweets, and speeches, to generate insights and predictions for various domains.
Bloomberg reported that another study found that ChatGPT could also interpret Federal Reserve announcements and gauge their impact on the market. ChatGPT is part of a broader trend of using natural language processing (NLP) to analyze and generate text.
Due to vast volumes of data and sophisticated computing resources, NLP, an area of AI that interacts between computers and human languages, has advanced quickly in recent years.
NLP applications include sentiment analysis, machine translation, speech recognition, text summarization, and more. The use of chatbots like ChatGPT to guide trading strategies is not new on Wall Street, but the results indicate that OpenAI’s technology can now grasp subtlety and context better than ever before.
Slavi Marinov, head of machine learning at Man AHL, said that ChatGPT is “one of the rare cases where the hype is real.”
