Big data applications in portfolio management: A review of techniques and strategies

Abstract

In the ever-evolving landscape of finance, the advent of big data has ushered in a paradigm shift, transforming the art and science of portfolio management from its traditional moorings to a future where data reigns supreme. This paper delves into the intricate dance between big data and portfolio management, aiming to demystify the journey from historical practices to the forefront of technological innovation in finance. Through a meticulous examination, the study sets out to map the evolution of portfolio management in the digital age, scrutinize the technological foundations essential for big data analytics, and explore the symbiotic relationship between big data capabilities and investment strategies. Employing a systematic literature review as its methodological backbone, the research navigates through the complexities of integrating big data into portfolio management, offering a panoramic view of the current landscape and the challenges that lie ahead. The findings illuminate the transformative impact of big data analytics, highlighting its potential to enhance decision-making, optimize risk assessment, and unearth new investment opportunities. However, the journey is fraught with challenges, including data privacy concerns, ethical considerations, and the need for continuous technological adaptation. In conclusion, the study advocates for a proactive embrace of big data, urging portfolio managers to cultivate a culture of innovation, ethical vigilance, and lifelong learning. As the financial sector stands on the brink of a data-driven era, this paper calls for a strategic reorientation towards the integration of big data analytics in portfolio management, paving the way for a future where informed decision-making and strategic foresight are paramount.