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We study a robust portfolio optimization problem under model uncertainty for an investor with logarithmic or power utility. The uncertainty is specified by a set of possible L\'evy triplets; that is, possible instantaneous drift, volatility…

Mathematical Finance · Quantitative Finance 2016-03-23 Ariel Neufeld , Marcel Nutz

We address the problem of portfolio optimization under the simplest coherent risk measure, i.e. the expected shortfall. As it is well known, one can map this problem into a linear programming setting. For some values of the external…

Physics and Society · Physics 2008-12-02 Stefano Ciliberti , Imre Kondor , Marc Mezard

We consider the problem of maximizing the asymptotic growth rate of an investor under drift uncertainty in the setting of stochastic portfolio theory (SPT). As in the work of Kardaras and Robertson we take as inputs (i) a Markovian…

Mathematical Finance · Quantitative Finance 2021-08-12 David Itkin , Martin Larsson

Recent focus on robustness to adversarial attacks for deep neural networks produced a large variety of algorithms for training robust models. Most of the effective algorithms involve solving the min-max optimization problem for training…

Machine Learning · Computer Science 2021-03-03 Yasaman Esfandiari , Aditya Balu , Keivan Ebrahimi , Umesh Vaidya , Nicola Elia , Soumik Sarkar

Portfolio optimization is an important process in finance that consists in finding the optimal asset allocation that maximizes expected returns while minimizing risk. When assets are allocated in discrete units, this is a combinatorial…

Statistical Mechanics · Physics 2022-10-04 Álvaro Rubio-García , Juan José García-Ripoll , Diego Porras

The sparse portfolio selection problem is one of the most famous and frequently-studied problems in the optimization and financial economics literatures. In a universe of risky assets, the goal is to construct a portfolio with maximal…

Optimization and Control · Mathematics 2022-02-22 Dimitris Bertsimas , Ryan Cory-Wright

We consider an investor who seeks to maximize her expected utility derived from her terminal wealth relative to the maximum performance achieved over a fixed time horizon, and under a portfolio drawdown constraint, in a market with local…

Portfolio Management · Quantitative Finance 2016-10-28 Ankush Agarwal , Ronnie Sircar

We investigate constrained optimal control problems for linear stochastic dynamical systems evolving in discrete time. We consider minimization of an expected value cost over a finite horizon. Hard constraints are introduced first, and then…

Optimization and Control · Mathematics 2011-07-07 Eugenio Cinquemani , Mayank Agarwal , Debasish Chatterjee , John Lygeros

This paper explores the statistical properties of forming constrained optimal portfolios within a high-dimensional set of assets. We examine portfolios with tracking error constraints, those with simultaneous tracking error and weight…

Portfolio Management · Quantitative Finance 2025-10-20 Mehmet Caner , Qingliang Fan

Robust yield curve estimation is crucial in fixed-income markets for accurate instrument pricing, effective risk management, and informed trading strategies. Traditional approaches, including the bootstrapping method and parametric…

Machine Learning · Computer Science 2025-10-27 Sina Molavipour , Alireza M. Javid , Cassie Ye , Björn Löfdahl , Mikhail Nechaev

We extend Relative Robust Portfolio Optimisation models to allow portfolios to optimise their distance to a set of benchmarks. Portfolio managers are also given the option of computing regret in a way which is more in line with market…

Portfolio Management · Quantitative Finance 2017-01-12 Gonçalo Simões , Mark McDonald , Stacy Williams , Daniel Fenn , Raphael Hauser

We consider the problem of minimizing a convex function over the intersection of finitely many simple sets which are easy to project onto. This is an important problem arising in various domains such as machine learning. The main difficulty…

Optimization and Control · Mathematics 2017-10-19 Achintya Kundu , Francis Bach , Chiranjib Bhattacharyya

We provide a framework for computing the exact worst-case performance of any algorithm belonging to a broad class of oracle-based first-order methods for composite convex optimization, including those performing explicit, projected,…

Optimization and Control · Mathematics 2019-11-22 Adrien B. Taylor , Julien M. Hendrickx , François Glineur

In this paper, an inexact proximal-point penalty method is studied for constrained optimization problems, where the objective function is non-convex, and the constraint functions can also be non-convex. The proposed method approximately…

Optimization and Control · Mathematics 2020-12-02 Qihang Lin , Runchao Ma , Yangyang Xu

This paper studies bandit convex optimization with constraints, where the learner aims to generate a sequence of decisions under partial information of loss functions such that the cumulative loss is reduced as well as the cumulative…

Machine Learning · Computer Science 2023-10-18 Yasunari Hikima

This survey reviews portfolio choice in settings where investment opportunities are stochastic due to, e.g., stochastic volatility or return predictability. It is explained how to heuristically compute candidate optimal portfolios using…

Portfolio Management · Quantitative Finance 2013-11-08 Ren Liu , Johannes Muhle-Karbe

In this paper, we study the lower iteration complexity bounds for finding the saddle point of a strongly convex and strongly concave saddle point problem: $\min_x\max_yF(x,y)$. We restrict the classes of algorithms in our investigation to…

Optimization and Control · Mathematics 2021-06-22 Junyu Zhang , Mingyi Hong , Shuzhong Zhang

Portfolio optimization involves selecting asset weights to minimize a risk-reward objective, such as the portfolio variance in the classical minimum-variance framework. Sparse portfolio selection extends this by imposing a cardinality…

Machine Learning · Statistics 2025-05-16 Sarat Moka , Matias Quiroz , Vali Asimit , Samuel Muller

We study U.S. Treasury yield curve forecasting under distributional uncertainty and recast forecasting as an operations research and managerial decision problem. Rather than minimizing average forecast error, the forecaster selects a…

Mathematical Finance · Quantitative Finance 2026-01-09 Jinjun Liu , Ming-Yen Cheng

We introduce a dynamic credit portfolio framework where optimal investment strategies are robust against misspecifications of the reference credit model. The risk-averse investor models his fear of credit risk misspecification by…

Portfolio Management · Quantitative Finance 2016-03-29 Agostino Capponi , Lijun Bo