An Introduction to Causal AI for Institutional Investment Managers

causaLens' Ben Steiner joins NYU Courant Professor Petter Kolm for an online NYU Courant's Mathematical Finance & Financial Data Science Seminar.

Abstract:
#CausalAI is a new category of intelligent machines designed to reason about the world like humans (according to AI visionaries):

- “To build truly intelligent machines, teach them cause and effect.” Judea Pearl, Turing Award winner 2011, Author ‘Book of Why?’, 2018

- “Causality is very important for the next steps of progress of machine learning.” Yoshua Bengio, Turing Award winner 2018, considered one of ‘the godfathers of Deep Learning’

- Nobel prize recently awarded for “analysis of causal relationships” The Sveriges Riksbank Prize in Economic Sciences in memory of Alfred Nobel, awarded to Professors Joshua Angrist and Guido Imbens in November 2021

Key moments:
0:00 What we mean by Causal AI
03:18 Foundational concepts in Causal AI
12:52 Traditional ML/AI vs Causal AI
15:00 Overview of Causal AI applications in asset management
16:10 Causal graphs
21:44 Structural causal models
25:39 Causal inference
31:07 Causal discovery
35:04 Incorporating human domain expertise
39:19 Client analytics and next-best-action in wealth management
41:52 Performance attribution
46:35 Portfolio construction
48:10 Human-guided research
49:55 Summary of causality concepts


#causality #assetmanagement #machinelearning #datascience #finance #investment #wealthmanagement