I Know First: Offering algorithmic forecasting solutions
A brief description of the company: I Know First, Ltd. brings science and math to the financial world by providing daily investment forecasts based on an advanced self-learning algorithm. Developed by CTO Lipa Roitman (Ph.D. from Weizmann Institute—35 years of experience), the algorithm utilizes artificial intelligence and machine learning techniques through which I Know First is able to analyze, model and predict the stock market.
Predictions are generated daily for a growing universe of more than 3,000 securities, including stocks, world indices, ETFs, interest rates and more for the short, medium and long-term horizons. The AI algorithm is applied to discover the best investment opportunities and used as a decision support system for existing investment processes or to develop systematic trading and allocation strategies for actively managed investment vehicles. It is adaptable and scalable allowing comprehensive customized algorithmic solutions including integration of additional markets depending on clients’ needs—family offices, wealth management firms and hedge funds. By offering technology to retail clients, I Know First also empowers private investors to identify opportunities in markets and manage their portfolios with more confidence.
Tell us a bit about your company and what it does.
I Know First applies artificial intelligence and machine learning techniques to search for patterns and relationships in huge sets of historical stock market data. The self-earning algorithm generates then ranked investment forecasts for over 3,000 assets including stocks, world indices, ETFs, interest rates and more for the short, medium and long-term horizons on a daily basis.
I Know First’s products are derived from the forecast outputs (signal and predictability indicators) and are offered in two tiers.
The first tier is the direct AI forecast for 3,000 assets ranked based on the signals. The product can be applied to detect investment opportunities, used as a decision support system (DSS) in the form of an algorithmic screen integrated into client's investment process in order to confirm or reject investment ideas before the execution, as well as in order to monitor current portfolio holdings. In case of institutional clients, the solution is usually customized to their needs; retail clients can choose from many standardized packages as e.g. Top10 Technology or Healthcare Stocks or world indices forecasts.
As part of the Tier 2 solution, I Know First develops and offers systematic trading strategies which are used in partnerships with hedge funds and other asset managing entities. These strategies are rules-based and utilize our algorithmic forecasting indicators in order to rank and select the trades as well as time the execution. This is our Tier 3 offering and here the final product is the trades recommendations for execution, depending on the investment strategy profile chosen. The type of strategies varies, including mean-reversion logic and more trend focused approaches, all generating high positive alpha while keeping beta in the 0.3-0.8 range, and yielding overall high risk-adjusted returns. The strategies can be used in partnership with I Know First to launch hedge funds, mutual funds or other investment vehicles.
How is it different than other companies in the same space?
Firstly, our innovative, independent and objective AI-based approach separates I Know First’s solution from traditional forecasting models and tools, which was developed and tested decades before the incorporation.
I Know First’s algorithm, incorporating multi-layered neural networks, allows to model the market without human derived assumptions and to keep the model flexible and adaptable. The financial market is a very complex system that continuously evolves beyond established theories and thus can’t be sufficiently explained and predicted by traditional models.
Applying artificial intelligence and deep learning to search for patterns, the algorithm is able to learn from and evolves with the most updated market information. It adapts to new conditions and features and has enough learning experience and intelligence to be able to make predictions in circumstances not observed before.
Secondly, the two-fold business model puts I Know First in a unique position: offering custom and standardized algorithmic forecasts to a variety of clients (institutional and retail) and researching and developing systematic trading strategies for fund management purposes on a revenue sharing basis.