AQR’s ‘Hard to Believe’ Study Spurs Clash Over AI Use for Quants

(Bloomberg) — Wall Street quants and leading financial academics are clashing over whether artificial intelligence has upended one of the core principles of systematic investing.

Quant traders, who use rules-based strategies derived from data analysis, have long believed their models get less effective when they become too complicated. That’s because they suck in too much of the distortive noise that makes predicting markets such a challenge in the first place.