Qraft Technologies Powers AI-Driven Wrap Account ‘KB AI Signal’ in Partnership with KB Securities and Plain Vanilla
KB Securities officially launched the wrap account service ‘KB AI Signal’, an AI-powered wrap account product, making advanced technology available to retail investors as of September 23rd, 2024.
Advanced AI Signals for Retail Investors
At the heart of this product is Qraft Technologies' U.S. stock risk prediction AI model, which has consistently demonstrated its effectiveness for over five years since its 2019 launch. Qraft’s signals have demonstrated strong performance, particularly during the COVID-19 crisis, when they effectively rebalanced portfolios. With the release of ‘KB AI Signal,’ retail investors now have access to this cutting-edge technology.
The U.S. stock risk prediction AI model functions in three critical phases: data processing, AI modeling, and the generation of signals for portfolio construction. In the data processing phase, the model collects, refines, and reconstructs essential data needed for AI learning. The quality and appropriateness of this data are vital to the AI’s overall performance. Using Qraft's proprietary data processing platform, KIRIN API, the model learns from real-time market data, such as stock market direction (momentum), risk levels (volatility), correlations with major asset classes, and approximately 70 macro indicators.
The next stage, AI modeling, is implemented through machine learning. Qraft has created a simulation environment that minimizes biases like survivorship and look-ahead bias to ensure consistency between learning outcomes and actual performance. The model is trained to anticipate periods of heightened market volatility and downward momentum by analyzing major financial crises over the past 20 years.
In the final stage, the model converts the predicted crisis probabilities into a signal, which is then reflected in the portfolio’s cash allocation. Qraft plans to continually monitor and improve the AI model's performance, and will include unstructured data, such as news and social media, in future training to enhance predictive capabilities and responsiveness.
A New Asset Management Model Combining AI and Human Expertise
The essence of ‘KB AI Signal’ is the powerful synergy between advanced AI technology and seasoned human expertise. The AI dynamically adjusts cash allocations during market downturns and increases exposure to growth stocks during upturns, with the goal of outperforming its benchmark, the S&P 500.
Furthermore, Plain Vanilla Investment’s experienced advisors actively rebalance portfolios to manage risk, and the final investment strategy is offered as a customized Wrap Account through KB Securities. This integration of AI insights and human judgment represents a new approach to asset management.