ProPicks Strategies represent a sophisticated analytical methodology combining artificial intelligence with expert analysis to identify stocks with historical outperformance patterns. This article explains the technology and process behind these strategies to help users better understand how they function.

The AI Analysis Foundation

ProPicks Strategies utilize a blend of artificial intelligence (AI) and expert human analysis to spotlight stocks with a potential to outperform market benchmarks. Our proprietary AI model analyzes historical financial data, with the intent of categorizing and rating different stocks and their historical performance. The AI model learns to identify different financial metrics and their correlation to the stock's overall performance throughout the years, and to assign relative weights to the various financial metrics. Based on the results of the analysis, our AI model then labels each stock with one of the following labels – underperformance, neutral performance, or outperformance, and thereby attempts to identify stocks which may have historically outperformed market benchmarks during certain periods of time.

Comprehensive Historical Dataset

Our historical dataset includes over 25 years of financial data and over 50 financial metrics across thousands of companies in various sectors. This expansive dataset is necessary in order to increase the accuracy of the weight assigned to each financial metric, contributing to a more refined analysis of stock performance. This also serves to mitigate any biases that could occur in the analytical process, aiming to enhance integrity of the data patterns identified.

Strategy Formation Process

After the historical stocks have been assigned a rating by the AI model, we are able to apply a diverse array of constraints and selection criteria to the data, for example, trading frequency, sector and industry, trading region, whether they are included in any stock index, market capitalization and liquidity. The highest rated stocks are grouped together into different groups based on criteria that Investing.com believes will be most relevant and useful for our users, such as, highest rated S&P500 stocks, highest rated tech stocks, etc.

Through this criteria process, we also remove stocks that may be irrelevant to the average investor, such as penny stocks. Each such group is a different ProPicks strategy which will be available to you through Investing.com. This step serves to make the ProPicks Strategies robust, relevant, and pragmatically applicable in real-world contexts.

Historical Performance Backtesting

Each of the ProPicks Strategies are then backtested against the historical data, in order to review and study how the strategy would have performed historically. This backtesting provides context for understanding the methodology and helps users visualize the historical performance patterns identified by our AI system.

Important Note About ProPicks

It's important to understand that ProPicks Strategies are analytical tools that present the output of our AI analysis system based on historical data patterns. These strategies are designed to provide information about stock characteristics and historical performance trends. They should be viewed as educational resources rather than as specific investment recommendations. As with all investment-related information, users should conduct their own research and consider consulting with financial professionals before making investment decisions.

Detailed descriptions can be found in the Methodology section.