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Risk-averse policies for natural gas futures trading using distributional reinforcement learning

arXiv.org Artificial Intelligence

Financial markets have experienced significant instabilities in recent years, creating unique challenges for trading and increasing interest in risk-averse strategies. Distributional Reinforcement Learning (RL) algorithms, which model the full distribution of returns rather than just expected values, offer a promising approach to managing market uncertainty. This paper investigates this potential by studying the effectiveness of three distributional RL algorithms for natural gas futures trading and exploring their capacity to develop risk-averse policies. Specifically, we analyze the performance and behavior of Categorical Deep Q-Network (C51), Quantile Regression Deep Q-Network (QR-DQN), and Implicit Quantile Network (IQN). To the best of our knowledge, these algorithms have never been applied in a trading context. These policies are compared against five Machine Learning (ML) baselines, using a detailed dataset provided by Predictive Layer SA, a company supplying ML-based strategies for energy trading. The main contributions of this study are as follows. (1) We demonstrate that distributional RL algorithms significantly outperform classical RL methods, with C51 achieving performance improvement of more than 32\%. (2) We show that training C51 and IQN to maximize CVaR produces risk-sensitive policies with adjustable risk aversion. Specifically, our ablation studies reveal that lower CVaR confidence levels increase risk aversion, while higher levels decrease it, offering flexible risk management options. In contrast, QR-DQN shows less predictable behavior. These findings emphasize the potential of distributional RL for developing adaptable, risk-averse trading strategies in volatile markets.


Safe Reinforcement Learning with Minimal Supervision

arXiv.org Artificial Intelligence

Reinforcement learning (RL) in the real world necessitates the development of procedures that enable agents to explore without causing harm to themselves or others. The most successful solutions to the problem of safe RL leverage offline data to learn a safe-set, enabling safe online exploration. However, this approach to safe-learning is often constrained by the demonstrations that are available for learning. In this paper we investigate the influence of the quantity and quality of data used to train the initial safe learning problem offline on the ability to learn safe-RL policies online. Specifically, we focus on tasks with spatially extended goal states where we have few or no demonstrations available. Classically this problem is addressed either by using hand-designed controllers to generate data or by collecting user-generated demonstrations. However, these methods are often expensive and do not scale to more complex tasks and environments. To address this limitation we propose an unsupervised RL-based offline data collection procedure, to learn complex and scalable policies without the need for hand-designed controllers or user demonstrations. Our research demonstrates the significance of providing sufficient demonstrations for agents to learn optimal safe-RL policies online, and as a result, we propose optimistic forgetting, a novel online safe-RL approach that is practical for scenarios with limited data. Further, our unsupervised data collection approach highlights the need to balance diversity and optimality for safe online exploration.


ActPC-Geom: Towards Scalable Online Neural-Symbolic Learning via Accelerating Active Predictive Coding with Information Geometry & Diverse Cognitive Mechanisms

arXiv.org Artificial Intelligence

This paper introduces ActPC-Geom, an approach to accelerate Active Predictive Coding (ActPC) in neural networks by integrating information geometry, specifically using Wasserstein-metric-based methods for measure-dependent gradient flows. We propose replacing KL-divergence in ActPC's predictive error assessment with the Wasserstein metric, suggesting this may enhance network robustness. To make this computationally feasible, we present strategies including: (1) neural approximators for inverse measure-dependent Laplacians, (2) approximate kernel PCA embeddings for low-rank approximations feeding into these approximators, and (3) compositional hypervector embeddings derived from kPCA outputs, with algebra optimized for fuzzy FCA lattices learned through neural architectures analyzing network states. This results in an ActPC architecture capable of real-time online learning and integrating continuous (e.g., transformer-like or Hopfield-net-like) and discrete symbolic ActPC networks, including frameworks like OpenCog Hyperon or ActPC-Chem for algorithmic chemistry evolution. Shared probabilistic, concept-lattice, and hypervector models enable symbolic-subsymbolic integration. Key features include (1) compositional reasoning via hypervector embeddings in transformer-like architectures for tasks like commonsense reasoning, and (2) Hopfield-net dynamics enabling associative long-term memory and attractor-driven cognitive features. We outline how ActPC-Geom combines few-shot learning with online weight updates, enabling deliberative thinking and seamless symbolic-subsymbolic reasoning. Ideas from Galois connections are explored for efficient hybrid ActPC/ActPC-Chem processing. Finally, we propose a specialized HPC design optimized for real-time focused attention and deliberative reasoning tailored to ActPC-Geom's demands.


Geophysical inverse problems with measurement-guided diffusion models

arXiv.org Artificial Intelligence

Solving inverse problems with the reverse process of a diffusion model represents an appealing avenue to produce highly realistic, yet diverse solutions from incomplete and possibly noisy measurements, ultimately enabling uncertainty quantification at scale. However, because of the intractable nature of the score function of the likelihood term (i.e., $\nabla_{\mathbf{x}_t} p(\mathbf{y} | \mathbf{x}_t)$), various samplers have been proposed in the literature that use different (more or less accurate) approximations of such a gradient to guide the diffusion process towards solutions that match the observations. In this work, I consider two sampling algorithms recently proposed under the name of Diffusion Posterior Sampling (DPS) and Pseudo-inverse Guided Diffusion Model (PGDM), respectively. In DSP, the guidance term used at each step of the reverse diffusion process is obtained by applying the adjoint of the modeling operator to the residual obtained from a one-step denoising estimate of the solution. On the other hand, PGDM utilizes a pseudo-inverse operator that originates from the fact that the one-step denoised solution is not assumed to be deterministic, rather modeled as a Gaussian distribution. Through an extensive set of numerical examples on two geophysical inverse problems (namely, seismic interpolation and seismic inversion), I show that two key aspects for the success of any measurement-guided diffusion process are: i) our ability to re-parametrize the inverse problem such that the sought after model is bounded between -1 and 1 (a pre-requisite for any diffusion model); ii) the choice of the training dataset used to learn the implicit prior that guides the reverse diffusion process. Numerical examples on synthetic and field datasets reveal that PGDM outperforms DPS in both scenarios at limited additional cost.


Data-Driven Radio Propagation Modeling using Graph Neural Networks

arXiv.org Artificial Intelligence

Modeling radio propagation is essential for wireless network design and performance optimization. Traditional methods rely on physics models of radio propagation, which can be inaccurate or inflexible. In this work, we propose using graph neural networks to learn radio propagation behaviors directly from real-world network data. Our approach converts the radio propagation environment into a graph representation, with nodes corresponding to locations and edges representing spatial and ray-tracing relationships between locations. The graph is generated by converting images of the environment into a graph structure, with specific relationships between nodes. The model is trained on this graph representation, using sensor measurements as target data. We demonstrate that the graph neural network, which learns to predict radio propagation directly from data, achieves competitive performance compared to traditional heuristic models. This data-driven approach outperforms classic numerical solvers in terms of both speed and accuracy. To the best of our knowledge, we are the first to apply graph neural networks to real-world radio propagation data to generate coverage maps, enabling generative models of signal propagation with point measurements only.


Multi-field Visualization: Trait design and trait-induced merge trees

arXiv.org Artificial Intelligence

Feature level sets (FLS) have shown significant potential in the analysis of multi-field data by using traits defined in attribute space to specify features in the domain. In this work, we address key challenges in the practical use of FLS: trait design and feature selection for rendering. To simplify trait design, we propose a Cartesian decomposition of traits into simpler components, making the process more intuitive and computationally efficient. Additionally, we utilize dictionary learning results to automatically suggest point traits. To enhance feature selection, we introduce trait-induced merge trees (TIMTs), a generalization of merge trees for feature level sets, aimed at topologically analyzing tensor fields or general multi-variate data. The leaves in the TIMT represent areas in the input data that are closest to the defined trait, thereby most closely resembling the defined feature. This merge tree provides a hierarchy of features, enabling the querying of the most relevant and persistent features. Our method includes various query techniques for the tree, allowing the highlighting of different aspects. We demonstrate the cross-application capabilities of this approach through five case studies from different domains.


Microservice Deployment in Space Computing Power Networks via Robust Reinforcement Learning

arXiv.org Artificial Intelligence

With the growing demand for Earth observation, it is important to provide reliable real-time remote sensing inference services to meet the low-latency requirements. The Space Computing Power Network (Space-CPN) offers a promising solution by providing onboard computing and extensive coverage capabilities for real-time inference. This paper presents a remote sensing artificial intelligence applications deployment framework designed for Low Earth Orbit satellite constellations to achieve real-time inference performance. The framework employs the microservice architecture, decomposing monolithic inference tasks into reusable, independent modules to address high latency and resource heterogeneity. This distributed approach enables optimized microservice deployment, minimizing resource utilization while meeting quality of service and functional requirements. We introduce Robust Optimization to the deployment problem to address data uncertainty. Additionally, we model the Robust Optimization problem as a Partially Observable Markov Decision Process and propose a robust reinforcement learning algorithm to handle the semi-infinite Quality of Service constraints. Our approach yields sub-optimal solutions that minimize accuracy loss while maintaining acceptable computational costs. Simulation results demonstrate the effectiveness of our framework.


Forecasting Anonymized Electricity Load Profiles

arXiv.org Artificial Intelligence

In the evolving landscape of data privacy, the anonymization of electric load profiles has become a critical issue, especially with the enforcement of the General Data Protection Regulation (GDPR) in Europe. These electric load profiles, which are essential datasets in the energy industry, are classified as personal behavioral data, necessitating stringent protective measures. This article explores the implications of this classification, the importance of data anonymization, and the potential of forecasting using microaggregated data. The findings underscore that effective anonymization techniques, such as microaggregation, do not compromise the performance of forecasting models under certain conditions (i.e., forecasting aggregated). In such an aggregated level, microaggregated data maintains high levels of utility, with minimal impact on forecasting accuracy. The implications for the energy sector are profound, suggesting that privacy-preserving data practices can be integrated into smart metering technology applications without hindering their effectiveness. In early 2009, the European Commission, through Directive 2009/72/EC, mandated the widespread deployment of smart meters across Europe [1].


HypeRL: Parameter-Informed Reinforcement Learning for Parametric PDEs

arXiv.org Artificial Intelligence

In this work, we devise a new, general-purpose reinforcement learning strategy for the optimal control of parametric partial differential equations (PDEs). Such problems frequently arise in applied sciences and engineering and entail a significant complexity when control and/or state variables are distributed in high-dimensional space or depend on varying parameters. Traditional numerical methods, relying on either iterative minimization algorithms or dynamic programming, while reliable, often become computationally infeasible. Indeed, in either way, the optimal control problem must be solved for each instance of the parameters, and this is out of reach when dealing with high-dimensional time-dependent and parametric PDEs. In this paper, we propose HypeRL, a deep reinforcement learning (DRL) framework to overcome the limitations shown by traditional methods. HypeRL aims at approximating the optimal control policy directly. Specifically, we employ an actor-critic DRL approach to learn an optimal feedback control strategy that can generalize across the range of variation of the parameters. To effectively learn such optimal control laws, encoding the parameter information into the DRL policy and value function neural networks (NNs) is essential. To do so, HypeRL uses two additional NNs, often called hypernetworks, to learn the weights and biases of the value function and the policy NNs. We validate the proposed approach on two PDE-constrained optimal control benchmarks, namely a 1D Kuramoto-Sivashinsky equation and a 2D Navier-Stokes equations, by showing that the knowledge of the PDE parameters and how this information is encoded, i.e., via a hypernetwork, is an essential ingredient for learning parameter-dependent control policies that can generalize effectively to unseen scenarios and for improving the sample efficiency of such policies.


FinSphere: A Conversational Stock Analysis Agent Equipped with Quantitative Tools based on Real-Time Database

arXiv.org Artificial Intelligence

Current financial Large Language Models (LLMs) struggle with two critical limitations: a lack of depth in stock analysis, which impedes their ability to generate professional-grade insights, and the absence of objective evaluation metrics to assess the quality of stock analysis reports. To address these challenges, this paper introduces FinSphere, a conversational stock analysis agent, along with three major contributions: (1) Stocksis, a dataset curated by industry experts to enhance LLMs' stock analysis capabilities, (2) AnalyScore, a systematic evaluation framework for assessing stock analysis quality, and (3) FinSphere, an AI agent that can generate high-quality stock analysis reports in response to user queries. Experiments demonstrate that FinSphere achieves superior performance compared to both general and domain-specific LLMs, as well as existing agent-based systems, even when they are enhanced with real-time data access and few-shot guidance. The integrated framework, which combines real-time data feeds, quantitative tools, and an instruction-tuned LLM, yields substantial improvements in both analytical quality and practical applicability for real-world stock analysis.