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Qraft Technologies, which provides artificial intelligence-enabled investment solutions, has launched an indicator that harnesses AI to show exposures in portfolios.
The offering is called the “Qraft AI Risk Indicator.” It forecasts risk in the US equity market for the upcoming week.
“Investors today are faced with unprecedented levels of uncertainty in financial markets,” Marcus Kim, founder and CEO of Qraft Technologies, said. “We developed the Qraft AI Risk Indicator to act as a compass for equity allocation amid volatility.”
“Our AI solutions rapidly streamline and process vast amounts of data, delivering a timely and accurate risk prediction that surpasses the limitations of traditional asset management,” Kim said.
The firm said that many market indicators “provide little actionable insight to help investors navigate volatile markets.”
The Qraft AI Risk Indicator provides a weekly assessment of expected market risk via a numerical signal that can be aligned to an equity/cash allocation. For example, with a “risk-on” signal, the indicator forecasts low risk in the coming week, suggesting that now is an opportune time to take on risk in the portfolio. Risk On scores range from no cash up to 14 per cent cash allocation, with the balance in equities.
Other signals are “cautious” and “risk-off.”
Under the cautious flag, the indicator forecasts median risk in the coming week, suggesting heightened vigilance. Cautious scores range from 15 per cent to 49 pr cent cash allocation, with the balance in equities.
The risk off indicator forecasts high risk in the coming week, suggesting that now is an opportune time to take off risk in the portfolio. Risk off scores range from 50 per cent to 100 per cent cash allocation, with the balance in equities.
The model, available weekly via Qraft’s webpage, was derived from an indicator originally developed by Qraft in 2019 for an institutional investor in South Korea.