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Portfolio construction traditionally relies on separately estimating expected returns and covariance matrices using historical statistics, often leading to suboptimal allocation under time-varying market conditions. This paper proposes a…

Portfolio Management · Quantitative Finance 2026-03-23 Keonvin Park

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

Our work focuses on deep learning (DL) portfolio optimization, tackling challenges in long-only, multi-asset strategies across market cycles. We propose training models with limited regime data using pre-training techniques and leveraging…

Portfolio Management · Quantitative Finance 2026-01-14 Brandon Luo , Jim Skufca

In this paper, we introduce an actor-critic algorithm called Deep Value Model Predictive Control (DMPC), which combines model-based trajectory optimization with value function estimation. The DMPC actor is a Model Predictive Control (MPC)…

Machine Learning · Computer Science 2019-10-09 Farbod Farshidian , David Hoeller , Marco Hutter

Deep Reinforcement learning is a branch of unsupervised learning in which an agent learns to act based on environment state in order to maximize its total reward. Deep reinforcement learning provides good opportunity to model the complexity…

Statistical Finance · Quantitative Finance 2021-08-05 Zhaolu Dong , Shan Huang , Simiao Ma , Yining Qian

We present an actor-critic-type reinforcement learning algorithm for solving the problem of hedging a portfolio of financial instruments such as securities and over-the-counter derivatives using purely historic data. The key characteristics…

Computational Finance · Quantitative Finance 2024-06-26 Hans Buehler , Phillip Murray , Ben Wood

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

Typical deep reinforcement learning (DRL) agents for dynamic portfolio optimization learn the factors influencing portfolio return and risk by analyzing the output values of the reward function while adjusting portfolio weights within the…

Machine Learning · Computer Science 2025-04-17 Ruoyu Sun , Angelos Stefanidis , Zhengyong Jiang , Jionglong Su

While deep reinforcement learning has achieved tremendous successes in various applications, most existing works only focus on maximizing the expected value of total return and thus ignore its inherent stochasticity. Such stochasticity is…

Machine Learning · Computer Science 2023-09-19 Han Zhong , Xun Deng , Ethan X. Fang , Zhuoran Yang , Zhaoran Wang , Runze Li

We adopt Deep Reinforcement Learning algorithms to design trading strategies for continuous futures contracts. Both discrete and continuous action spaces are considered and volatility scaling is incorporated to create reward functions which…

Computational Finance · Quantitative Finance 2019-11-25 Zihao Zhang , Stefan Zohren , Stephen Roberts

This study presents a Reinforcement Learning (RL)-based portfolio management model tailored for high-risk environments, addressing the limitations of traditional RL models and exploiting market opportunities through two-sided transactions…

Portfolio Management · Quantitative Finance 2024-08-13 Ali Habibnia , Mahdi Soltanzadeh

Online portfolio selection is an integral componentof wealth management. The fundamental undertaking is tomaximise returns while minimising risk given investor con-straints. We aim to examine and improve modern strategiesto generate higher…

Computational Engineering, Finance, and Science · Computer Science 2021-09-29 Matthew Kruger , Terence L. van Zyl , Andrew Paskaramoorthy

Modeling and managing portfolio risk is perhaps the most important step to achieve growing and preserving investment performance. Within the modern portfolio construction framework that built on Markowitz's theory, the covariance matrix of…

Risk Management · Quantitative Finance 2021-10-28 Hengxu Lin , Dong Zhou , Weiqing Liu , Jiang Bian

Portfolio management via reinforcement learning is at the forefront of fintech research, which explores how to optimally reallocate a fund into different financial assets over the long term by trial-and-error. Existing methods are…

Artificial Intelligence · Computer Science 2021-02-09 Rundong Wang , Hongxin Wei , Bo An , Zhouyan Feng , Jun Yao

With the improvement of computer performance and the development of GPU-accelerated technology, trading with machine learning algorithms has attracted the attention of many researchers and practitioners. In this research, we propose a novel…

Portfolio Management · Quantitative Finance 2021-03-23 Huanming Zhang , Zhengyong Jiang , Jionglong Su

Machine Learning algorithms and Neural Networks are widely applied to many different areas such as stock market prediction, face recognition and population analysis. This paper will introduce a strategy based on the classic Deep…

Portfolio Management · Quantitative Finance 2020-03-16 Ziming Gao , Yuan Gao , Yi Hu , Zhengyong Jiang , Jionglong Su

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

Asset allocation is an investment strategy that aims to balance risk and reward by constantly redistributing the portfolio's assets according to certain goals, risk tolerance, and investment horizon. Unfortunately, there is no simple…

Portfolio Management · Quantitative Finance 2022-08-16 Ricard Durall

We introduce a reinforcement learning framework for retail robo-advising. The robo-advisor does not know the investor's risk preference, but learns it over time by observing her portfolio choices in different market environments. We develop…

Portfolio Management · Quantitative Finance 2020-04-16 Humoud Alsabah , Agostino Capponi , Octavio Ruiz Lacedelli , Matt Stern

We propose a novel portfolio trading system, which contains a feature preprocessing module and a trading module. The feature preprocessing module consists of various data processing operations, while in the trading part, we integrate the…

Trading and Market Microstructure · Quantitative Finance 2021-11-02 Lin Li