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The deployment of autonomous AI agents in derivatives markets has widened a practical gap between static model calibration and realized hedging outcomes. We introduce two reinforcement learning frameworks, a novel Replication Learning of…

Artificial Intelligence · Computer Science 2026-03-10 Minxuan Hu , Ziheng Chen , Jiayu Yi , Wenxi Sun

Model-predictive-control (MPC) offers an optimal control technique to establish and ensure that the total operation cost of multi-energy systems remains at a minimum while fulfilling all system constraints. However, this method presumes an…

This article aims to combine factor investing and reinforcement learning (RL). The agent learns through sequential random allocations which rely on firms' characteristics. Using Dirichlet distributions as the driving policy, we derive…

Portfolio Management · Quantitative Finance 2021-06-28 Eric André , Guillaume Coqueret

Reinforcement learning (RL) based investment strategies have been widely adopted in portfolio management (PM) in recent years. Nevertheless, most RL-based approaches may often emphasize on pursuing returns while ignoring the risks of the…

Portfolio Management · Quantitative Finance 2023-06-13 Zhenglong Li , Hejun Huang , Vincent Tam

In value-based reinforcement learning (RL), unlike in supervised learning, the agent faces not a single, stationary, approximation problem, but a sequence of value prediction problems. Each time the policy improves, the nature of the…

Machine Learning · Computer Science 2021-01-05 Will Dabney , André Barreto , Mark Rowland , Robert Dadashi , John Quan , Marc G. Bellemare , David Silver

We study a game between liquidity provider and liquidity taker agents interacting in an over-the-counter market, for which the typical example is foreign exchange. We show how a suitable design of parameterized families of reward functions…

Multiagent Systems · Computer Science 2023-08-02 Nelson Vadori , Leo Ardon , Sumitra Ganesh , Thomas Spooner , Selim Amrouni , Jared Vann , Mengda Xu , Zeyu Zheng , Tucker Balch , Manuela Veloso

Reinforcement learning (RL) is an appealing paradigm for training intelligent agents, enabling policy acquisition from the agent's own autonomously acquired experience. However, the training process of RL is far from automatic, requiring…

Artificial Intelligence · Computer Science 2025-02-25 Zhao Yang , Thomas M. Moerland , Mike Preuss , Aske Plaat , Edward S. Hu

Reinforcement learning (RL) algorithms aim to learn optimal decisions in unknown environments through experience of taking actions and observing the rewards gained. In some cases, the environment is not influenced by the actions of the RL…

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

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 or reinforcement learning (RL) approaches have been adapted as reactive agents to quickly learn and respond with new investment strategies for portfolio management under the highly turbulent financial market environments in recent…

Portfolio Management · Quantitative Finance 2024-09-11 Zhenglong Li , Vincent Tam , Kwan L. Yeung

Although safety stock optimisation has been studied for more than 60 years, most companies still use simplistic means to calculate necessary safety stock levels, partly due to the mismatch between existing analytical methods' emphases on…

Multiagent Systems · Computer Science 2021-07-05 Edward Elson Kosasih , Alexandra Brintrup

This paper explores the mean-variance portfolio selection problem in a multi-period financial market characterized by regime-switching dynamics and uncontrollable liabilities. To address the uncertainty in the decision-making process within…

Optimization and Control · Mathematics 2025-09-04 Zhongqin Gao , Ping Chen , Xun Li , Yan Lv , Wenhao Zhang

Reinforcement learning (RL) has emerged as a transformative approach for financial trading, enabling dynamic strategy optimization in complex markets. This study explores the integration of sentiment analysis, derived from large language…

Computational Finance · Quantitative Finance 2024-11-19 Ananya Unnikrishnan

Multi-agent systems (MAS) and reinforcement learning (RL) are widely used to enhance the agentic capabilities of large language models (LLMs). MAS improves task performance through role-based orchestration, while RL uses environmental…

Machine Learning · Computer Science 2026-02-02 Yujie Zhao , Lanxiang Hu , Yang Wang , Minmin Hou , Hao Zhang , Ke Ding , Jishen Zhao

This thesis presents the results of a comprehensive research project focused on applying Reinforcement Learning (RL) to the problem of market making in financial markets. Market makers (MMs) play a fundamental role in providing liquidity,…

Machine Learning · Computer Science 2025-07-28 Óscar Fernández Vicente

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

Reinforcement Learning (RL) is a learning paradigm concerned with learning to control a system so as to maximize an objective over the long term. This approach to learning has received immense interest in recent times and success manifests…

Artificial Intelligence · Computer Science 2018-07-26 Sanyam Kapoor

This paper investigates the application of Deep Reinforcement Learning (DRL) for Environment, Social, and Governance (ESG) financial portfolio management, with a specific focus on the potential benefits of ESG score-based market regulation.…

Portfolio Management · Quantitative Finance 2023-07-20 Eduardo C. Garrido-Merchán , Sol Mora-Figueroa-Cruz-Guzmán , María Coronado-Vaca

Reinforcement learning (RL) is a framework to optimize a control policy using rewards that are revealed by the system as a response to a control action. In its standard form, RL involves a single agent that uses its policy to accomplish a…

Systems and Control · Electrical Eng. & Systems 2021-11-24 Juan Cervino , Juan Andres Bazerque , Miguel Calvo-Fullana , Alejandro Ribeiro