Financial Friend

Inspiration

Socially responsible investing is a new trend of an investment strategy to bring both goods to society while attaining more value from alternative assets. However, from my experience of moving myself from an electrical engineer sector to the financial technology sector, investing in any securities takes much time and effort to understand what does each financial factor mean for those who have limited knowledge in finance. Therefore, this project aims to overcome such problems.

What it does

It gathers information from several sources to create a comprehensive dataset and then provide a user with a group of securities to construct a portfolio that tackles both goals of sustainability and optimization.

How we built it

Information in the dataset contains ESG (environmental, social, and governance) score indicators and essential financial factors such as return on equity, company growth rate, and dividend yield. Then, we apply the hierarchical clustering machine learning model to classify a group of stocks. After the classification process, we then select the best cluster based on the balance of ESG scores and financial factors. Lastly, the user can select which and how many groups to select to construct a portfolio. Then the user will be indicated with what sector and how many sectors are in the portfolio to have a better diversification of the portfolio.

Challenges we ran into

Constructing a useful and updated dataset is one of the biggest challenges we ran into such as gathering reliable sources of company social responsibility reports.

Accomplishments that we're proud of

Utilizing an unsupervised machine learning model with the knowledge of finance to draw a conclusion to help in ease of investment for the individual investors. This is proof that knowledge from the class can be used and leveraged in a real-world application.

What we learned

We have learned that investing in ESG can be ensured that the company will last long due to the responsibility to the environment. That means this kind of stock suited well with long term investment.

What's next for Financial Friend

We want to bring more information out of each cluster. For now we can not rank each cluster to tell user which one to invest in and the user has to decide based on some background knowledge which some of them may not have. For our next step, we want to be able to rank then and separate them into business sectors to help user build a good and sustainable portfolio. We will also include news and updates of each company to help user decide. We want to bring Financial Friend to a more accessible platform. Making it a mobile application will make the app more convenient and save time for casual investors with a limited amount of time to devote to their investing.

Built With

• python