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This paper shows how reinforcement learning can be used to derive optimal hedging strategies for derivatives when there are transaction costs. The paper illustrates the approach by showing the difference between using delta hedging and…

Computational Finance · Quantitative Finance 2021-03-31 Jay Cao , Jacky Chen , John Hull , Zissis Poulos

Bias in data can have unintended consequences that propagate to the design, development, and deployment of machine learning models. In the financial services sector, this can result in discrimination from certain financial instruments and…

Cryptography and Security · Computer Science 2019-11-12 Reginald Bryant , Celia Cintas , Isaac Wambugu , Andrew Kinai , Komminist Weldemariam

After AlphaFold won the Nobel Prize, protein prediction with deep learning once again became a hot topic. We comprehensively explore advanced deep learning methods applied to protein structure prediction and design. It begins by examining…

In general, traders test their trading strategies by applying them on the historical market data (backtesting), and then apply to the future trades the strategy that achieved the maximum profit on such past data. In this paper, we propose a…

Trading and Market Microstructure · Quantitative Finance 2022-10-24 Ivan Letteri , Giuseppe Della Penna , Giovanni De Gasperis , Abeer Dyoub

We propose to use deep learning to estimate parameters in statistical models when standard likelihood estimation methods are computationally infeasible. We show how to estimate parameters from max-stable processes, where inference is…

Methodology · Statistics 2021-08-02 Amanda Lenzi , Julie Bessac , Johann Rudi , Michael L. Stein

While machine learning is traditionally a resource intensive task, embedded systems, autonomous navigation and the vision of the Internet-of-Things fuel the interest in resource efficient approaches. These approaches require a carefully…

The increase in network attacks has necessitated the development of robust and efficient intrusion detection systems (IDS) capable of identifying malicious activities in real-time. In the last five years, deep learning algorithms have…

Cryptography and Security · Computer Science 2024-02-28 Richard Kimanzi , Peter Kimanga , Dedan Cherori , Patrick K. Gikunda

Recently, Deep Neural Network (DNN) algorithms have been explored for predicting trends in time series data. In many real world applications, time series data are captured from dynamic systems. DNN models must provide stable performance…

Machine Learning · Computer Science 2020-09-24 Kouame Hermann Kouassi , Deshendran Moodley

Sustainable financial markets play an important role in the functioning of human society. Still, the detection and prediction of risk in financial markets remain challenging and draw much attention from the scientific community. Here we…

Physics and Society · Physics 2018-11-27 Jingfang Fan , Keren Cohen , Louis M. Shekhtman , Sibo Liu , Jun Meng , Yoram Louzoun , Shlomo Havlin

While machine learning is traditionally a resource intensive task, embedded systems, autonomous navigation, and the vision of the Internet of Things fuel the interest in resource-efficient approaches. These approaches aim for a carefully…

In this paper we survey the most recent advances in supervised machine learning and high-dimensional models for time series forecasting. We consider both linear and nonlinear alternatives. Among the linear methods we pay special attention…

Econometrics · Economics 2021-04-12 Ricardo P. Masini , Marcelo C. Medeiros , Eduardo F. Mendes

This study presents a deep reinforcement learning approach for global hedging of long-term financial derivatives. A similar setup as in Coleman et al. (2007) is considered with the risk management of lookback options embedded in guarantees…

Risk Management · Quantitative Finance 2020-07-31 Alexandre Carbonneau

This thesis explored applications of the new emerging techniques of artificial intelligence and deep learning (neural networks in particular) for predictive maintenance, diagnostics and prognostics. Many neural architectures such as…

Machine Learning · Statistics 2023-06-21 Abdeldjalil Latrach

Company fundamentals are key to assessing companies' financial and overall success and stability. Forecasting them is important in multiple fields, including investing and econometrics. While statistical and contemporary machine learning…

Statistical Finance · Quantitative Finance 2025-06-04 Felix Divo , Eric Endress , Kevin Endler , Kristian Kersting , Devendra Singh Dhami

Option pricing is a significant problem for option risk management and trading. In this article, we utilize a framework to present financial data from different sources. The data is processed and represented in a form of 2D tensors in three…

Computational Finance · Quantitative Finance 2021-09-24 Muyang Ge , Shen Zhou , Shijun Luo , Boping Tian

Despite the power of deep neural networks for a wide range of tasks, an overconfident prediction issue has limited their practical use in many safety-critical applications. Many recent works have been proposed to mitigate this issue, but…

Machine Learning · Computer Science 2020-08-14 Jooyoung Moon , Jihyo Kim , Younghak Shin , Sangheum Hwang

A study on power market price forecasting by deep learning is presented. As one of the most successful deep learning frameworks, the LSTM (Long short-term memory) neural network is utilized. The hourly prices data from the New England and…

Machine Learning · Computer Science 2018-10-24 Yongli Zhu , Songtao Lu , Renchang Dai , Guangyi Liu , Zhiwei Wang

Deep Learning and big data have shown tremendous success in bioinformatics and computational biology in recent years; artificial intelligence methods have also significantly contributed in the task of protein function classification. This…

Biomolecules · Quantitative Biology 2022-11-18 Divyanshu Aggarwal , Yasha Hasija

In this paper, we propose to utilize Automated Machine Learning to adaptively search a neural architecture for deepfake detection. This is the first time to employ automated machine learning for deepfake detection. Based on our explored…

Computer Vision and Pattern Recognition · Computer Science 2021-08-13 Ping Liu , Yuewei Lin , Yang He , Yunchao Wei , Liangli Zhen , Joey Tianyi Zhou , Rick Siow Mong Goh , Jingen Liu

Stock price prediction has been an important research theme both academically and practically. Various methods to predict stock prices have been studied until now. The feature that explains the stock price by a cross-section analysis is…

Portfolio Management · Quantitative Finance 2020-07-21 Masaya Abe , Kei Nakagawa
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