Artificial Intelligence in Financial Portfolio Management

Abstract

In finance, a portfolio is a person's or company's total financial holdings. Portfolio risk and expected return are managed via portfolio optimization. Portfolio optimization is a kind of diversification that decreases portfolio risk by combining assets with varying risk profiles. Since the global financial crisis of 2008, asset management practices have undergone a sea change. This study examines a wide range of artificial intelligence (AI)-based asset management systems, focusing on the most urgent concerns and highlighting the benefits in the analysis of fundamentals and producing new investment strategies. Trading is another area where AI is making a big impact. One of the most intriguing aspects of AI is its ability to analyze vast amounts of data and generate trading tips. Using AI in asset management comes with certain disadvantages as well. AI models are difficult for managers to keep track of since they are often complex and opaque. This research provides a throughout overview of the avenues where AI is used in financial portfolio management.