Financial Risk Relation Identification through Dual-view Adaptation
Chiu, Wei-Ning, Wang, Yu-Hsiang, Hsiao, Andy, Huang, Yu-Shiang, Wang, Chuan-Ju
–arXiv.org Artificial Intelligence
A multitude of interconnected risk events -- ranging from regulatory changes to geopolitical tensions -- can trigger ripple effects across firms. Identifying inter-firm risk relations is thus crucial for applications like portfolio management and investment strategy. Traditionally, such assessments rely on expert judgment and manual analysis, which are, however, subjective, labor-intensive, and difficult to scale. To address this, we propose a systematic method for extracting inter-firm risk relations using Form 10-K filings -- authoritative, standardized financial documents -- as our data source. Leveraging recent advances in natural language processing, our approach captures implicit and abstract risk connections through unsupervised fine-tuning based on chronological and lexical patterns in the filings. This enables the development of a domain-specific financial encoder with a deeper contextual understanding and introduces a quantitative risk relation score for transparency, interpretable analysis. Extensive experiments demonstrate that our method outperforms strong baselines across multiple evaluation settings. Our codes are available at https://github.com/cnclabs/codes.fin.relation.
arXiv.org Artificial Intelligence
Dec-1-2025
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