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This paper presents a deep reinforcement learning (DRL) framework for dynamic portfolio optimization under market uncertainty and risk. The proposed model integrates a Sharpe ratio-based reward function with direct risk control mechanisms,…

Portfolio Management · Quantitative Finance 2025-11-17 Emmanuel Lwele , Sabuni Emmanuel , Sitali Gabriel Sitali

Portfolio optimization requires dynamic allocation of funds by balancing the risk and return tradeoff under dynamic market conditions. With the recent advancements in AI, Deep Reinforcement Learning (DRL) has gained prominence in providing…

Portfolio Management · Quantitative Finance 2025-05-08 Arishi Orra , Aryan Bhambu , Himanshu Choudhary , Manoj Thakur , Selvaraju Natarajan

Portfolio optimization is essential for balancing risk and return in financial decision-making. Deep Reinforcement Learning (DRL) has stood out as a cutting-edge tool for portfolio optimization that learns dynamic asset allocation using…

Machine Learning · Computer Science 2025-09-16 Himanshu Choudhary , Arishi Orra , Manoj Thakur

Dynamic hedging is the practice of periodically transacting financial instruments to offset the risk caused by an investment or a liability. Dynamic hedging optimization can be framed as a sequential decision problem; thus, Reinforcement…

Computational Finance · Quantitative Finance 2024-02-26 Andrei Neagu , Frédéric Godin , Clarence Simard , Leila Kosseim

Portfolio Management is the process of overseeing a group of investments, referred to as a portfolio, with the objective of achieving predetermined investment goals. Portfolio optimization is a key component that involves allocating the…

Portfolio Management · Quantitative Finance 2026-02-20 Srijan Sood , Kassiani Papasotiriou , Marius Vaiciulis , Tucker Balch

Classical portfolio optimization often requires forecasting asset returns and their corresponding variances in spite of the low signal-to-noise ratio provided in the financial markets. Modern deep reinforcement learning (DRL) offers a…

Portfolio Management · Quantitative Finance 2023-05-19 Alessio Brini , Daniele Tantari

Generating asset-specific trading signals based on the financial conditions of the assets is one of the challenging problems in automated trading. Various asset trading rules are proposed experimentally based on different technical analysis…

Artificial Intelligence · Computer Science 2020-10-28 Mehran Taghian , Ahmad Asadi , Reza Safabakhsh

Deep reinforcement learning (DRL) has been widely studied in the portfolio management task. However, it is challenging to understand a DRL-based trading strategy because of the black-box nature of deep neural networks. In this paper, we…

Portfolio Management · Quantitative Finance 2021-12-21 Mao Guan , Xiao-Yang Liu

Artificial intelligence is transforming financial investment decision-making frameworks, with deep reinforcement learning demonstrating substantial potential in robo-advisory applications. This paper addresses the limitations of traditional…

Portfolio Management · Quantitative Finance 2025-02-24 Gang Huang , Xiaohua Zhou , Qingyang Song

Dynamic portfolio optimization is the process of sequentially allocating wealth to a collection of assets in some consecutive trading periods, based on investors' return-risk profile. Automating this process with machine learning remains a…

Machine Learning · Computer Science 2019-01-28 Pengqian Yu , Joon Sern Lee , Ilya Kulyatin , Zekun Shi , Sakyasingha Dasgupta

Portfolio management is the art and science in fiance that concerns continuous reallocation of funds and assets across financial instruments to meet the desired returns to risk profile. Deep reinforcement learning (RL) has gained increasing…

Portfolio Management · Quantitative Finance 2023-10-30 Yinheng Li , Junhao Wang , Yijie Cao

Financial trading has been widely analyzed for decades with market participants and academics always looking for advanced methods to improve trading performance. Deep reinforcement learning (DRL), a recently reinvigorated method with…

Trading and Market Microstructure · Quantitative Finance 2021-06-17 Ali Hirsa , Joerg Osterrieder , Branka Hadji-Misheva , Jan-Alexander Posth

In the ever-changing and intricate landscape of financial markets, portfolio optimisation remains a formidable challenge for investors and asset managers. Conventional methods often struggle to capture the complex dynamics of market…

Machine Learning · Statistics 2025-10-09 Himanshu Choudhary , Arishi Orra , Manoj Thakur

Recent deep reinforcement learning (DRL) methods in finance show promising outcomes. However, there is limited research examining the behavior of these DRL algorithms. This paper aims to investigate their tendencies towards holding or…

Trading and Market Microstructure · Quantitative Finance 2024-07-16 Alireza Mohammadshafie , Akram Mirzaeinia , Haseebullah Jumakhan , Amir Mirzaeinia

We introduce a deep reinforcement learning (DRL) approach for solving management problems including inventory management, dynamic pricing, and recommendation. This DRL approach has the potential to lead to a large management model based on…

Artificial Intelligence · Computer Science 2024-03-04 Jinyang Jiang , Xiaotian Liu , Tao Ren , Qinghao Wang , Yi Zheng , Yufu Du , Yijie Peng , Cheng Zhang

In distributed optimization, the practical problem-solving performance is essentially sensitive to algorithm selection, parameter setting, problem type and data pattern. Thus, it is often laborious to acquire a highly efficient method for a…

Optimization and Control · Mathematics 2024-01-04 Daokuan Zhu , Tianqi Xu , Jie Lu

While researchers in the asset management industry have mostly focused on techniques based on financial and risk planning techniques like Markowitz efficient frontier, minimum variance, maximum diversification or equal risk parity, in…

Machine Learning · Computer Science 2020-10-20 Eric Benhamou , David Saltiel , Sandrine Ungari , Abhishek Mukhopadhyay

This research paper delves into the application of Deep Reinforcement Learning (DRL) in asset-class agnostic portfolio optimization, integrating industry-grade methodologies with quantitative finance. At the heart of this integration is our…

Artificial Intelligence · Computer Science 2024-03-14 Philip Ndikum , Serge Ndikum

Dynamic Portfolio optimization is the process of distribution and rebalancing of a fund into different financial assets such as stocks, cryptocurrencies, etc, in consecutive trading periods to maximize accumulated profits or minimize risks…

Portfolio Management · Quantitative Finance 2021-02-15 Kumar Yashaswi

Traditional Long Short-Term Memory (LSTM) networks are effective for handling sequential data but have limitations such as gradient vanishing and difficulty in capturing long-term dependencies, which can impact their performance in dynamic…

Computational Engineering, Finance, and Science · Computer Science 2026-04-29 Faezeh Sarlakifar , Mohammadreza Mohammadzadeh Asl , Sajjad Rezvani Khaledi , Armin Salimi-Badr
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