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A First Look at Financial Data Analysis Using ChatGPT-4o

Signal Editorial Team
AI-generated and human-reviewed news meta-commentary
2 minute read

ChatGPT-4o Shows Promise for Financial Data Analysis

Researchers tested ChatGPT-4o against traditional statistical software for financial analysis tasks. The AI model performs comparably to Stata in most areas, though implementation differences cause occasional discrepancies.

What Researchers Tested

Zifeng Feng, Bingxin Li, and Feng Liu from the University of Texas at El Paso and West Virginia University evaluated ChatGPT-4o across four financial analysis tasks:

  • Zero-shot prompting for financial queries
  • Time series analysis
  • Risk and return calculations
  • ARMA-GARCH model estimation

Their findings appear in the Journal of Risk and Financial Management.

Key Results

ChatGPT-4o handled most financial analysis tasks at levels matching Stata, the standard statistical software. The model processed data efficiently and provided coherent analytical output.

However, differences in how ChatGPT-4o and Stata implement calculations led to some errors and inconsistent results. The researchers attribute these issues to underlying methodological variations rather than fundamental limitations.

Practical Applications

The research team identifies three benefits for integrating ChatGPT-4o into financial analysis:

Faster data processing: The model handles routine calculations quickly, freeing analysts for complex work.

Enhanced analysis: ChatGPT-4o’s natural language capabilities help interpret results and generate insights.

Improved decisions: Combining AI efficiency with traditional methods supports better-informed investment choices.

Implementation Considerations

Financial analysts should:

  • Verify ChatGPT-4o outputs against established methods
  • Understand where implementation differences affect results
  • Use the model for initial analysis and pattern detection
  • Apply traditional software for final calculations requiring precision

What This Means

ChatGPT-4o offers a viable complement to traditional financial analysis tools. While not replacing specialized software, it provides accessible, efficient analysis capabilities. The model works best when analysts understand its strengths and verify critical calculations.

As large language models improve, expect wider adoption in financial research and practice. Early adopters gain experience while the technology matures.

Next step: Download the full paper to review specific test cases and implementation details at https://ssrn.com/abstract=4849578