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We present a method for finding optimal hedging policies for arbitrary initial portfolios and market states. We develop a novel actor-critic algorithm for solving general risk-averse stochastic control problems and use it to learn hedging…

Computational Finance · Quantitative Finance 2022-07-18 Phillip Murray , Ben Wood , Hans Buehler , Magnus Wiese , Mikko S. Pakkanen

Reinforcement learning (RL) techniques have shown great success in many challenging quantitative trading tasks, such as portfolio management and algorithmic trading. Especially, intraday trading is one of the most profitable and risky tasks…

Trading and Market Microstructure · Quantitative Finance 2022-08-23 Shuo Sun , Wanqi Xue , Rundong Wang , Xu He , Junlei Zhu , Jian Li , Bo An

We develop a deep reinforcement learning framework for dynamic portfolio optimization that combines a Dirichlet policy with cross-sectional attention mechanisms. The Dirichlet formulation ensures that portfolio weights are always feasible,…

Computational Engineering, Finance, and Science · Computer Science 2025-10-09 Pei Xue , Yuanchun Ye

Portfolio Selection is an important real-world financial task and has attracted extensive attention in artificial intelligence communities. This task, however, has two main difficulties: (i) the non-stationary price series and complex asset…

Machine Learning · Computer Science 2020-03-09 Yifan Zhang , Peilin Zhao , Qingyao Wu , Bin Li , Junzhou Huang , Mingkui Tan

In this paper, we propose a machine learning algorithm for time-inconsistent portfolio optimization. The proposed algorithm builds upon neural network based trading schemes, in which the asset allocation at each time point is determined by…

Portfolio Management · Quantitative Finance 2023-09-06 Kristoffer Andersson , Cornelis W. Oosterlee

We propose a reinforcement learning (RL) framework that leverages multimodal data including historical stock prices, sentiment analysis, and topic embeddings from news articles, to optimize trading strategies for SP100 stocks. Building upon…

Portfolio Management · Quantitative Finance 2024-12-24 Sumit Nawathe , Ravi Panguluri , James Zhang , Sashwat Venkatesh

Optimizing portfolio performance is a fundamental challenge in financial modeling, requiring the integration of advanced clustering techniques and data-driven optimization strategies. This paper introduces a comparative backtesting approach…

Machine Learning · Computer Science 2025-01-23 Keon Vin Park

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

This study introduces a dynamic investment framework to enhance portfolio management in volatile markets, offering clear advantages over traditional static strategies. Evaluates four conventional approaches : equal weighted, minimum…

Portfolio Management · Quantitative Finance 2025-04-07 Jinhui Li , Wenjia Xie , Luis Seco

Portfolio management issues have been extensively studied in the field of artificial intelligence in recent years, but existing deep learning-based quantitative trading methods have some areas where they could be improved. First of all, the…

Computational Finance · Quantitative Finance 2024-02-27 Qishuo Cheng , Le Yang , Jiajian Zheng , Miao Tian , Duan Xin

The study seeks to develop an effective strategy based on the novel framework of statistical arbitrage based on graph clustering algorithms. Amalgamation of quantitative and machine learning methods, including the Kelly criterion, and an…

Portfolio Management · Quantitative Finance 2024-06-18 Adam Korniejczuk , Robert Ślepaczuk

Volatility-based trading strategies have attracted a lot of attention in financial markets due to their ability to capture opportunities for profit from market dynamics. In this article, we propose a new volatility-based trading strategy…

Trading and Market Microstructure · Quantitative Finance 2023-08-21 Ivan Letteri

Portfolio optimization is one of the most attentive fields that have been researched with machine learning approaches. Many researchers attempted to solve this problem using deep reinforcement learning due to its efficient inherence that…

Portfolio Management · Quantitative Finance 2021-01-11 Tae Wan Kim , Matloob Khushi

We study the dynamic portfolio selection of an investor who uses deep learning methods to forecast stock market excess returns. In a two-asset allocation problem, deep neural networks -- both feedforward and long short-term memory (LSTM)…

General Finance · Quantitative Finance 2026-02-16 Mykola Babiak , Jozef Barunik

This paper demonstrates how to apply machine learning algorithms to distinguish good stocks from the bad stocks. To this end, we construct 244 technical and fundamental features to characterize each stock, and label stocks according to…

Portfolio Management · Quantitative Finance 2018-08-09 XingYu Fu , JinHong Du , YiFeng Guo , MingWen Liu , Tao Dong , XiuWen Duan

Machine learning and in particular deep learning algorithms are the emerging approaches to data analysis. These techniques have transformed traditional data mining-based analysis radically into a learning-based model in which existing data…

Machine Learning · Computer Science 2020-04-17 Neda Tavakoli , Sima Siami-Namini , Mahdi Adl Khanghah , Fahimeh Mirza Soltani , Akbar Siami Namin

Recent deep reinforcement learning (DRL) methods in finance show promising outcomes. However, there is limited research examining the behavior of these DRL algorithms. This paper aims to investigate their tendencies towards holding or…

Trading and Market Microstructure · Quantitative Finance 2024-07-16 Alireza Mohammadshafie , Akram Mirzaeinia , Haseebullah Jumakhan , Amir Mirzaeinia

This paper provides an empirical study explores the application of deep learning algorithms-Multilayer Perceptron (MLP), Convolutional Neural Networks (CNN), Long Short-Term Memory (LSTM), and Transformer-in constructing long-short stock…

Statistical Finance · Quantitative Finance 2024-11-26 Junjie Guo

Traditional ETF stock selection methods and reinforcement learning models such as the Asynchronous Advantage Actor-Critic (A3C) often suffer from high-dimensional feature spaces and overfitting when applied to complex financial markets.…

Computational Engineering, Finance, and Science · Computer Science 2025-12-29 Yen-Ku Liu , Yun-Cheng Tsai , Samuel Yen-Chi Chen

Portfolio management aims at maximizing the return on investment while minimizing risk by continuously reallocating the assets forming the portfolio. These assets are not independent but correlated during a short time period. A graph…

Computational Finance · Quantitative Finance 2021-05-19 Farzan Soleymani , Eric Paquet