Asset valuation is very often tied to fundamentals such as (discounted) cash flows, though unlike the laws of nature, finance is predominantly a human endeavor. Behavioral economics is capturing some of these human endeavors (and irrationalities!) and artificial intelligence (AI) is definitely also making an impact in this area.
A research note from data and risk analytics firm AlgoDynamix provides demonstrates how AI based behavioral price forecasting can (and should) be used in investment management.
For pricing methodology, the research covers: up flags and down flags; benchmark details and related considerations. And for portfolio examples and ideas: long, short and combined portfolio with a long/short overlay are discussed. The final section of this research note also includes a customer case study from a California based multi-asset investor.