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We show that AI-driven investment strategies are inherently self-defeating at scale. As AI adoption rises, three mutually reinforcing channels -- signal crowding, performative signal erosion, and Red Queen competition -- compress excess…

General Finance · Quantitative Finance 2026-05-26 Shuchen Meng , Xupeng Chen

This paper tries to address the problem of stock market prediction leveraging artificial intelligence (AI) strategies. The stock market prediction can be modeled based on two principal analyses called technical and fundamental. In the…

Statistical Finance · Quantitative Finance 2021-07-05 Sohrab Mokhtari , Kang K. Yen , Jin Liu

AI stocks trade at extraordinary valuations. We develop an asset pricing model in which investors use AI stocks to hedge against an AI singularity that displaces their consumption. Because markets are incomplete -- investors cannot trade…

General Finance · Quantitative Finance 2026-04-21 Andrew Y. Chen

The proposed system aims to use various machine learning algorithms to enhance financial prediction and generate highly accurate analyses. It introduces an AI-driven platform which offers inflation-analysis, stock market prediction, and…

Computational Engineering, Finance, and Science · Computer Science 2025-10-30 Vishal Patil , Kavya Bhand , Kaustubh Mukdam , Kavya Sharma , Manas Kawtikwar , Prajwal Kavhar , Hridayansh Kaware

This research systematically develops and evaluates various hybrid modeling approaches by combining traditional econometric models (ARIMA and ARFIMA models) with machine learning and deep learning techniques (SVM, XGBoost, and LSTM models)…

Trading and Market Microstructure · Quantitative Finance 2025-05-27 Dominik Stempień , Robert Ślepaczuk

Although machine learning approaches have been widely used in the field of finance, to very successful degrees, these approaches remain bespoke to specific investigations and opaque in terms of explainability, comparability, and…

Trading and Market Microstructure · Quantitative Finance 2022-06-22 Artur Sokolovsky , Luca Arnaboldi

In the field of quantitative trading, it is common practice to transform raw historical stock data into indicative signals for the market trend. Such signals are called alpha factors. Alphas in formula forms are more interpretable and thus…

Statistical Finance · Quantitative Finance 2023-06-23 Shuo Yu , Hongyan Xue , Xiang Ao , Feiyang Pan , Jia He , Dandan Tu , Qing He

Agent-based models provide a constructive approach to studying emergent dynamics in life-like systems composed of interacting, adaptive agents. Financial markets serve as a canonical example of such systems, where collective price dynamics…

Computational Finance · Quantitative Finance 2026-04-28 Ryuji Hashimoto , Ryosuke Takata , Masahiro Suzuki , Yuki Tanaka , Kiyoshi Izumi

We study how AI agents form expectations and trade in experimental asset markets. Using a simulated open-call auction populated by autonomous Large Language Model (LLM) agents, we document three main findings. First, AI agents exhibit…

General Economics · Economics 2026-04-21 Shumiao Ouyang , Pengfei Sui

With the increasing maturity and expansion of the cryptocurrency market, understanding and predicting its price fluctuations has become an important issue in the field of financial engineering. This article introduces an innovative Genetic…

Computational Finance · Quantitative Finance 2024-11-06 Quechen Yang

The problem of time-series forecasting in non-stationary and complex environments is a challenging task in machine learning, especially with heterogeneous numerical and textual data present. Traditional statistical models like…

Statistical Finance · Quantitative Finance 2026-05-05 Alexis Lazanas , Spyridon Karpouzis

Autonomous trading strategies have been a subject of research within the field of artificial intelligence (AI) for aconsiderable period. Various AI techniques have been explored to develop autonomous agents capable of trading financial…

Computational Finance · Quantitative Finance 2025-08-20 Paulo André Lima de Castro

With the rapid development of big data and computing devices, low-latency automatic trading platforms based on real-time information acquisition have become the main components of the stock trading market, so the topic of quantitative…

Computational Finance · Quantitative Finance 2023-09-22 Jiashu Lou

Stock trading is one of the popular ways for financial management. However, the market and the environment of economy is unstable and usually not predictable. Furthermore, engaging in stock trading requires time and effort to analyze,…

Machine Learning · Computer Science 2025-05-20 Yunfei Luo , Zhangqi Duan

Stock price prediction is challenging due to global economic instability, high volatility, and the complexity of financial markets. Hence, this study compared several machine learning algorithms for stock market prediction and further…

Machine Learning · Computer Science 2024-12-11 Akhila Mamillapalli , Bayode Ogunleye , Sonia Timoteo Inacio , Olamilekan Shobayo

One of the most important tasks in quantitative investment research is mining new alphas (effective trading signals or factors). Traditional alpha mining methods, either hand-crafted factor synthesizing or algorithmic factor mining (e.g.,…

Computational Finance · Quantitative Finance 2025-09-23 Saizhuo Wang , Hang Yuan , Leon Zhou , Lionel M. Ni , Heung-Yeung Shum , Jian Guo

An appropriate calibration and forecasting of volatility and market risk are some of the main challenges faced by companies that have to manage the uncertainty inherent to their investments or funding operations such as banks, pension funds…

Risk Management · Quantitative Finance 2020-08-19 E. Ramos-Pérez , P. J. Alonso-González , J. J. Núñez-Velázquez

This paper is to explore the possibility to use alternative data and artificial intelligence techniques to trade stocks. The efficacy of the daily Twitter sentiment on predicting the stock return is examined using machine learning methods.…

Artificial Intelligence · Computer Science 2018-01-09 Catherine Xiao , Wanfeng Chen

With the development of artificial intelligence technology, quantitative trading systems represented by reinforcement learning have emerged in the stock trading market. The authors combined the deep Q network in reinforcement learning with…

Statistical Finance · Quantitative Finance 2021-12-01 Yizhuo Li , Peng Zhou , Fangyi Li , Xiao Yang

Predicting cryptocurrency price trends remains a major challenge due to the volatility and complexity of digital asset markets. Artificial intelligence (AI) has emerged as a powerful tool to address this problem. This study proposes a…