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Stochastic differential equation (SDE) models are the foundation for pricing and hedging financial derivatives. The drift and volatility functions in SDE models are typically chosen to be algebraic functions with a small number (less than…

Computational Finance · Quantitative Finance 2024-06-04 Lei Fan , Justin Sirignano

Mathematical modelling is ubiquitous in the financial industry and drives key decision processes. Any given model provides only a crude approximation to reality and the risk of using an inadequate model is hard to detect and quantify. By…

Mathematical Finance · Quantitative Finance 2020-07-09 Patryk Gierjatowicz , Marc Sabate-Vidales , David Šiška , Lukasz Szpruch , Žan Žurič

We present a novel control variate technique for enhancing the efficiency of Monte Carlo (MC) estimation of expectations involving solutions to stochastic differential equations (SDEs). Our method integrates a primary fine-time-step…

Probability · Mathematics 2025-11-12 Josselin Garnier , Laurent Mertz

We present a hierarchical, control theory inspired method for variational inference (VI) for neural stochastic differential equations (SDEs). While VI for neural SDEs is a promising avenue for uncertainty-aware reasoning in time-series, it…

Machine Learning · Computer Science 2025-05-26 Rembert Daems , Manfred Opper , Guillaume Crevecoeur , Tolga Birdal

Monte Carlo estimation in plays a crucial role in stochastic reaction networks. However, reducing the statistical uncertainty of the corresponding estimators requires sampling a large number of trajectories. We propose control variates…

Methodology · Statistics 2021-10-19 Michael Backenköhler , Luca Bortolussi , Verena Wolf

We present a novel model Graph Neural Stochastic Differential Equations (Graph Neural SDEs). This technique enhances the Graph Neural Ordinary Differential Equations (Graph Neural ODEs) by embedding randomness into data representation using…

Machine Learning · Computer Science 2023-08-25 Richard Bergna , Felix Opolka , Pietro Liò , Jose Miguel Hernandez-Lobato

There has been a great deal of recent interest in learning and approximation of functions that can be expressed as expectations of a given nonlinearity with respect to its random internal parameters. Examples of such representations include…

Optimization and Control · Mathematics 2022-12-05 Tanya Veeravalli , Maxim Raginsky

We present a novel variational framework for performing inference in (neural) stochastic differential equations (SDEs) driven by Markov-approximate fractional Brownian motion (fBM). SDEs offer a versatile tool for modeling real-world…

Machine Learning · Computer Science 2023-10-20 Rembert Daems , Manfred Opper , Guillaume Crevecoeur , Tolga Birdal

Stochastic Differential Equations (SDEs) are used as statistical models in many disciplines. However, intractable likelihood functions for SDEs make inference challenging, and we need to resort to simulation-based techniques to estimate and…

Methodology · Statistics 2014-08-12 Grant Schneider , Peter F. Craigmile , Radu Herbei

In statistics and machine learning, approximation of an intractable integration is often achieved by using the unbiased Monte Carlo estimator, but the variances of the estimation are generally high in many applications. Control variates…

Machine Learning · Statistics 2019-10-16 Ruosi Wan , Mingjun Zhong , Haoyi Xiong , Zhanxing Zhu

We study pathwise approximation of scalar stochastic differential equations at a single point. We provide the exact rate of convergence of the minimal errors that can be achieved by arbitrary numerical methods that are based (in a…

Probability · Mathematics 2007-05-23 Thomas Muller-Gronbach

We introduce stochastic normalizing flows, an extension of continuous normalizing flows for maximum likelihood estimation and variational inference (VI) using stochastic differential equations (SDEs). Using the theory of rough paths, the…

Machine Learning · Statistics 2020-02-27 Liam Hodgkinson , Chris van der Heide , Fred Roosta , Michael W. Mahoney

In this work, we explore modeling change points in time-series data using neural stochastic differential equations (neural SDEs). We propose a novel model formulation and training procedure based on the variational autoencoder (VAE)…

Machine Learning · Computer Science 2025-06-16 Yousef El-Laham , Zhongchang Sun , Haibei Zhu , Tucker Balch , Svitlana Vyetrenko

The combination of Monte Carlo methods and deep learning has recently led to efficient algorithms for solving partial differential equations (PDEs) in high dimensions. Related learning problems are often stated as variational formulations…

Machine Learning · Computer Science 2022-08-08 Lorenz Richter , Julius Berner

Stochastic differential equations (SDEs) are one of the most important representations of dynamical systems. They are notable for the ability to include a deterministic component of the system and a stochastic one to represent random…

Machine Learning · Computer Science 2021-05-19 Noura Dridi , Lucas Drumetz , Ronan Fablet

We propose neural control variates (NCV) for unbiased variance reduction in parametric Monte Carlo integration. So far, the core challenge of applying the method of control variates has been finding a good approximation of the integrand…

Machine Learning · Computer Science 2020-09-07 Thomas Müller , Fabrice Rousselle , Jan Novák , Alexander Keller

Neural Stochastic Differential Equations (NSDEs) model the drift and diffusion functions of a stochastic process as neural networks. While NSDEs are known to make accurate predictions, their uncertainty quantification properties have been…

Machine Learning · Computer Science 2022-09-13 Andreas Look , Melih Kandemir , Barbara Rakitsch , Jan Peters

We study a coupled system of controlled stochastic differential equations (SDEs) driven by a Brownian motion and a compensated Poisson random measure, consisting of a forward SDE in the unknown process $X(t)$ and a \emph{predictive…

Optimization and Control · Mathematics 2015-05-20 Bernt Øksendal , Agnès Sulem

We address a general optimal switching problem over finite horizon for a stochastic system described by a differential equation driven by Brownian motion. The main novelty is the fact that we allow for infinitely many modes (or regimes,…

Optimization and Control · Mathematics 2019-08-07 Marco Fuhrman , Marie-Amélie Morlais

This paper presents machine learning techniques and deep reinforcement learningbased algorithms for the efficient resolution of nonlinear partial differential equations and dynamic optimization problems arising in investment decisions and…

Optimization and Control · Mathematics 2021-04-19 Maximilien Germain , Huyên Pham , Xavier Warin
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