(NEW YORK)–AI VentureTech, Inc. outlines plans to develop an A.I. enabled trading algorithm geared specifically towards potential distress in corporate High Yield debt market.
Along with a host of other research, the Company plans to develop an A.I. enabled trading algorithm geared specifically towards stress in the High Yield Corporate Debt market.
The Company will develop its trading algorithm to utilizes A.I. and Machine Learning techniques that will execute buy and sell trade orders, according to number of factors, and statistical trading data points in high yield corporate ETF’s and companies.
Trade Existing Instruments
The bond market has historically been a vast but old-fashioned corner of the financial system, with little transparency and trading often conducted by phone. But there are a number of select publicly traded vehicles on which to trade any stress in the underlying corporate high yield market on which we can fashion an algorithm around.
One of many ETF’s the algorithm could trade are as example iShares iBoxx $ High Yid Corp Bond (NYSE:HYG) or SPDR Barclays Capital High Yield Bond ETF (NYSE:JNK), which are just a couple of ETF’s that track the high yield corporate bond sector. In addition, the trading algorithm may also target select companies with heavy debt that may be pushed into ‘junk’ status due to economic or interest rate pressures.
Thomas Bustamante, the Founder and CEO of AI VentureTech, Inc. commented, “The continued rise in US interest rates, along with prospects of slower economic activity in 2019, could set the stage for possible liquidity strain in certain corporate high-yield debt markets. We feel this product could be a great way to demonstrate the Fintech uses of AI in financial markets, while also providing us a possible hedge to any economic slowdown, or potential crisis in the corporate high yield market.”
The use of A.I. to trade a basket of stocks is not something new as many larger trading firms on Wall Street utilize these for trading larger ‘big board’ issues. More recent, the market saw the launch of an actual ETF called The AI Powered Equity ETF (NYSE:AIEQ), which seeks results through its proprietary quantitative models developed by Equbot with IBM Watson artificial intelligence.
Note: This envisioned trading algorithm would not be a trading market for high yield debt instruments, but rather one that trades existing public securities, such as ETF’s and debt heavy securities, to achieve its goal. This trading platform will NOT be open to general public to trade, but rather as our own in-house proprietary holding technology as we embark on building a host of new and unique A.I. based fintech projects within the company.
Corporate Debt Bubble
Baa 3-grade corporate debt outstanding reached an “unprecedented” 56.8% of speculative-grade, or “junk,” high-yield corporate bonds outstanding. By comparison, the ratio of outstanding Baa 3-rated bonds to high-yield bonds was 32.5% before the 2008-2009 financial crisis, 36.9% before the 2001 recession and 22.2% before the 1990-1991 downturn.
As US interest rates continue to rise, and economic activity potentially slows in 2019, we feel a trading algorithm geared towards potential stress in the corporate high yield sector as a way to provide our company a hedge against any future recession.
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AI VentureTech is a network of institutional and accredited investors interested in start-ups in the areas of Artificial Intelligence, Automation, and Robotics. To join our investor network please visit https://aiventuretech.com/investors/
About AI VentureTech, Inc.
Located in New York City, AI VentureTech, Inc. is an early stage data science research firm focused on utilizing artificial intelligence in the areas of biomedical research, robotics, and 5G cloud development. Our team of data scientists and engineers can customize AI-powered software and technical solutions for both companies and institutions looking to leverage data and machine learning algorithms for greater business value. The Company seeks growth through both collaboration and acquisition of dynamic new start-ups in the areas of business analytics, machine learning, natural language processing (NLP), visualization tools, predictive modeling, and cloud advanced analysis. www.aiventuretech.com
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