Renee Yao, Founder and CIO of Hedge Fund Neo Ivy, discusses the rationale and challenges of using complex AI techniques in the investment process. They explore the benefits of AI-driven investing, including uncovering non-linear relationships and generating alpha. The chapter emphasizes the importance of risk controls and modern infrastructure in this space.
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question_answer ANECDOTE
Renee Yao's Career Journey
Renee Yao's AI journey started from a childhood fascination with supercomputers and math.
She shifted from pursuing a PhD to building quant strategies at Citadel and founding Neo Ivy.
insights INSIGHT
Modern AI vs Traditional ML
Traditional machine learning focuses on patterns in historic data, assuming history repeats itself.
Modern AI learns and adjusts in real-time using leading indicators, improving performance in open-ended environments like markets.
insights INSIGHT
Leveraging Many Modest Signals
AI models with ~53% accuracy can still generate alpha by targeting varied but consistent signals.
Combining many such signals leverages the law of large numbers to achieve strong returns.
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In this episode we hear from Renee Yao, Founder and CIO of Hedge Fund Neo Ivy, a firm which uses complex AI techniques in the investment process. Renee discusses the rationale for adopting these AI techniques, the evolution of these methods, and also the pitfalls and challenges of an AI-driven approach. Renee Yao is in discussion with Eloise Goulder, Head of the Data Assets & Alpha Group.
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