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Groups are more accurate than the best (or the collective mind of) crypto traders: a new alpha horizon for quantitative asset management
An experiment by Cindicator Lab, a newly-launched research centre for forecasting, found that cryptocurrency forecasts formed through debates in small groups are more accurate and valuable than predictions from both the wisdom of the crowd and superforecasters. The results highlight the importance of differences in opinion for predicting events with high uncertainty.
Cindicator Lab launch
The experiment marks the launch of Cindicator Lab (the CND Lab), an independent research centre founded by Cindicator. Cindicator Lab aims to research the phenomenon of the wisdom of the crowd and the connection between human intellectual efforts and artificial intelligence. Cindicator is using key findings in new investment strategies as part of an upcoming major ecosystem upgrade.
The CND Lab is led by Cindicator’s analysts and quant researchers. Its projects will be proposed by Cindicator, a separate asset manager, or research partners. The CND Lab is independent of any influence of any state government or corporation.
The Crowd of Crowds experiment
Researchers wanted to see if the average of consensus answers in small groups could create better forecasts than the average of a large number of independent views (known as ‘the wisdom of the crowd’). According to previous research by Professor Joaquín Navajas of Universidad Torcuato Di Tella (Argentina), the accuracy is higher if groups have different opinions, can freely discuss the question, and agree on a joint answer.
For the experiment, researchers invited 100 top analysts from Cindicator’s collective intelligence platform to compete in groups of five for a monetary prize by answering questions over four weeks. The experiment covered 28 of the most tradeable digital assets: BTC, ETH, XRP, BCH, LTC, BNB, EOS, XLM, TRX, ADA, XMR, LINK, NEO, ATOM, DASH, ETC, ...
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