Macroaxis AI Investment Opportunity

Our earlier study addressed the Macroaxis portfolio optimization based upon a statistical approach to making optimal investment decisions across different financial instruments.

The present research analysis illustrates the Macroaxis Artificial Intelligence (AI) investment opportunity.


  1. Market Elasticity
  2. Assets Rated By Market Efficiency
  3. Artificial Intelligence Risk And Return Landscape
  4. Technical Analysis Of Total Daily Returns
  5. Artificial Intelligence Correlation Analysis
Photo by Chris Liverani on Unsplash

The AI framework completely automates your asset selection decisions. It is designed to address the most technical part of the wealth optimization process, including asset allocation, equity research, portfolio diversification, portfolio rebalancing, and portfolio suggestion.

Let’s look at the 20 US stocks suggested by AI

Thematic idea: 20 US stocks

You can see that the average monthly AI suggested portfolio returns exceed that of DOW.

AI based asset allocation vs DOW 
May-June-July 2022

The AI recommended asset allocation and market caitalization (MC) that depends primarily on your current time horizon and your ability to tolerate risk. You can continually rebalance it towards the optimal future performance using the AI optimization engine.

As a general rule, conservative investors tend to hold large-cap stocks, whereas agressive investors looking for more risk prefer small-cap and mid-cap equities.

By diversifying artificial intelligence theme assets across categories where investment returns move up and down under different market conditions, an investor can protect against significant losses. Historically, the returns of the major asset categories such as stocks, funds, ETFs or cryptocurrencies, have not moved up and down simultaneously. Market conditions that usually cause one asset classification to do well often cause another asset classification to have average or poor returns. By investing in more than one asset classification, investors will almost always reduce the risk of losing money, and their portfolio’s overall investment returns will have softer volatility. If one asset category’s investment return falls, you’ll be in a position to counteract your losses in that asset category with better investment returns in another asset classification.

Market Elasticity

The market elasticity of a theme is the measure of how responsive the resulted portfolio will be to changes in the market or economic conditions. Most investing themes are subject to two types of risk – systematic (i.e., market) and unsystematic (i.e., nonmarket or company-specific) risk. Unsystematic risk is the risk that events specific to AI theme will adversely affect the performance of its constituents. This type of risk can be diversified away by optimizing the themed equities into an efficient portfolio with different positions weighted according to their correlations. On the other hand, systematic risk is the risk that the theme constituents’ prices will be affected by overall stock market movements and cannot be diversified. Below are essential risk-adjusted performance indicators that can help to measure the overall market elasticity of the AI theme.

Assets Rated By Market Efficiency

Many investors optimize their portfolios to maintain a risk-return balance that meets their personal investing preferences and liquidity needs. Understanding the relationship between the Sharpe ratio, risk, and expected return will help you build an optimal portfolio out of your selected theme. The Sharpe ratios describe how much excess return you receive for the extra volatility you endure for holding a position in a themed portfolio. There are the essential efficiency ratios that can help you quickly create a reliable input to your portfolio optimization process.

Artificial Intelligence Risk And Return Landscape

An investing theme such as Artificial Intelligence should be diversified across asset classifications. So, in addition to allocating your investments among stocks, funds, ETFs, cash, and possibly cryptocurrencies, you will also need to spread out your investments within each asset category. The key is to identify investments in segments of each asset category that may perform differently under different market conditions. One way of diversifying your investments within an asset category is investing in a wide range of entities and industry sectors with different risk-return characteristics.

Technical Analysis Of Total Daily Returns

The below table shows technical indicators of the assets from the current unweighted theme. These indicators can be significantly improved after the theme is optimized. So, by diversifying this theme into an optimal portfolio, it is possible to reduce not only its total risk but also increase alpha, improve the information ratio and and increase the potential upside.

Artificial Intelligence Correlation Analysis

The Artificial Intelligence theme correlation table is a two-dimensional matrix that shows the correlation coefficient between all of the theme’s pairs of securities. The cells in the table are color-coded to highlight significantly positive and negative relationships. The correlation table represents the degree of relationship between the price movements of different assets included in the theme. In other words, it is a table showing correlation coefficients between all of the theme’s constituents. Each cell in the table shows the correlation between one pair of potential positions.


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