TOKYO -- Japan's Kabu.com Securities will launch an artificial intelligence service in May that helps retail investors choose stocks to buy and sell.
The online brokerage will jointly develop the system with U.S.-based AI technology startup Alpaca. The system will scan all of Japan's 3,700 or so listed companies to identify stocks with similar trends. The Tokyo-based company hopes to support the trading of its retail investor clients by offering technology that can unearth correlations unnoticeable to most human investors.
Kabu.com will also offer functions that help identify overvalued and undervalued shares by finding correlating stock charts. The company expects the system to be used in pairs trading, where investors find two correlated stocks and go long on the underperforming shares while short selling the overperforming issue. Known for their ability to withstand changing market conditions, such trading tactics have also been used effectively at hedge funds outside Japan.
The brokerage hopes the service improves its clients' stock market access and boosts trading.