Since the dawn of the 2000s, Artificial Intelligence (AI) has been making waves through its penetration into various sectors. While AI helps increase efficiency and speed in a system, the lack of feedback when faced with errors has been a glaring concern. Recently developed Explainable Artificial Intelligence (XAI) technology tackles this issue by analyzing data to provide users with explanations for given issues and activities. Utilizing this technology to create investment strategies, Elystar aims to increase net returns by reducing machine/AI-made errors and thereby successfully leveraging the superior insights provided by AI.
“Artificial Intelligence in finance is a relatively new concept that is still being explored and experimented upon. While few of the firms experimenting are sparingly using it for short-term trading, we have spent the past 15 months developing models to use it for long-term investments. One simple way to look at this concept is to compare it with Microsoft Excel. While Excel is used in different fields and by different people, it is used in various ways and forms. Similarly, AI has a number of variations in which it can be utilized, so no two approaches may be completely the same. AI not only helps us scale and analyze data rapidly, but the integration of Explainable AI allows us to understand and eliminate unwarranted biases to create a sound investment strategy,” said Dr. Satya Gautam Vadlamudi, Founder and CEO of Elystar.
He further added, “Our aim is to create innovative solutions that integrate finance and XAI to provide superior net returns to our clients. Our proprietary technology that finds value-to-price gaps in the financial market is adaptable to markets across the world. This has allowed us to achieve high risk-adjusted returns compared to the market in our simulations over several years. We are now focused on setting up alternative investment funds to provide value to our investors.”
Speaking about the inception of Elystar, Dr. Vadlamudi said, “I have been quite passionate about AI since my days as a student at IIT Kharagpur. While my time later at Google was exciting, I left it to pursue research in AI, subsequently earning a PhD. During the last couple of years, I started testing my thesis of using XAI modeling to make valuation estimates more accurate. While it was a difficult process that required quite a lot of adaptations, we have been able to build a robust framework. Testing it on years of data from the Indian stock market generated consistently high risk-adjusted returns with explanations that aligned with the fundamental principles of finance. This led to the birth of Elystar.”
Elystar is a Mumbai-based investment management firm focused on investing in listed equities. The firm invests using in-house strategies developed in a data-backed manner with Explainable Artificial Intelligence (XAI) technology. Elystar is currently working on setting up Alternative Investment Funds (AIFs) to serve its clients.
For more information, please visit www.elystarllp.com.
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