ItemConference Paper

Machine Learning in Investment Analysis-Enhancing or Replacing Human Judgment

Title
Machine Learning in Investment Analysis-Enhancing or Replacing Human Judgment
Creator
Kafila; Ghai, Bhupaesh; Champaneria, Tushar; Sidhu, Kawerinder Singh; Lourens, Melanie; Acharjee, Purnendu Bikash
Description
Machine Learning (ML) involvement in investment analysis is quickly revolutionizing the investment-based decisions through becoming highly accurate, quick, and embracing increased data processing capabilities. This paper is to research on whether ML is complementary or a possible replacement to human financial judgment. We run experiments over 1.2 million financial transactions between 150 firms comparing old style analyst recommendations and ML-models, including XGBoost, LSTM and Random Forest. The findings indicate that ML models outperformed prediction capability by 19.6 percent and lowered the volatility of the portfolios by 14.3 percent in 5-year investment. Also, the ML-Aided decision-making was better than human (only) approaches in 78 percent of the cases in markets with high volatility or that involved trading in complicated assets. The qualitative variables like regulatory policy changes and investor sentiment however were too difficult to decipher under the leadership of ML only. Our results indicate that ML supports rather than supers the human judgement and thus demonstrates a hybrid paradigm of decision making that resolves computational exactitude with context sensitive understanding in the modern investment scenarios. 2025 IEEE.
Source
Proceedings - 2025 IEEE 1st International Conference on Smart Innovations in Systems, Infrastructure, Mechanical, Power, AI and Computing Technologies, SISIMPACT 2025;pp.295-300
Date
01-01-2025
Publisher
Institute of Electrical and Electronics Engineers Inc.
Subject
Financial Forecasting; Human Judgment; Hybrid Decision-Making; Investment Analysis; Machine Learning; Portfolio Optimization
Coverage
Kafila, School of Business, SR University, Telangana, Warangal, India; Ghai B., University Institute of Computing, Chandigarh University, India; Champaneria T., L. D. College of Engineering, Computer Engineering, Ahmedabad, India; Sidhu K.S., Uttaranchal Institute of Management, Uttaranchal University, Uttarakhand, Dehradun, India; Lourens M., Durban University of Technology, Faculty of Management Sciences, South Africa; Acharjee P.B., CHRIST University, Computer Science, Bengaluru, India
Rights
Restricted Access; Hardcopy may be available in the library
Relation
ISBN: 979-833155787-4;
Format
online
Language
English
Type
Conference paper

Citation

Kafila; Ghai, Bhupaesh; Champaneria, Tushar; Sidhu, Kawerinder Singh; Lourens, Melanie; Acharjee, Purnendu Bikash, “Machine Learning in Investment Analysis-Enhancing or Replacing Human Judgment,” CHRIST (Deemed To Be University) Institutional Repository, accessed June 17, 2026, https://archives.christuniversity.in/items/show/26205.

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