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Physics-Informed Singular-Value Learning for Cross-Covariances Forecasting in Financial Markets

Manolakis, Efstratios, Bongiorno, Christian, Mantegna, Rosario Nunzio

arXiv.org Machine Learning

A new wave of work on covariance cleaning and nonlinear shrinkage has delivered asymptotically optimal analytical solutions for large covariance matrices. The same framework has been generalized to empirical cross-covariance matrices, whose singular value decomposition identifies canonical comovement modes between two asset sets, with singular values quantifying the strength of each mode and providing natural targets for shrinkage. Existing analytical cross-covariance cleaners are derived under strong stationarity and large-sample assumptions, and they typically rely on mesoscopic regularity conditions such as bounded spectra; macroscopic common modes (e.g., a global market factor) violate these conditions. When applied to real equity returns, where dependence structures drift over time and global modes are prominent, we find that these theoretically optimal formulas do not translate into robust out-of-sample performance. We address this gap by designing a random-matrix-inspired neural architecture that operates in the empirical singular-vector basis and learns a nonlinear mapping from empirical singular values to their corresponding cleaned values. By construction, the network can recover the analytical solution as a special case, yet it remains flexible enough to adapt to non-stationary dynamics and mode-driven distortions. Trained on a long history of equity returns, the proposed method achieves a more favorable bias-variance trade-off than purely analytical cleaners and delivers systematically lower out-of-sample cross-covariance prediction errors. Our results demonstrate that combining random-matrix theory with machine learning makes asymptotic theories practically effective in realistic time-varying markets.






Baxter Permutation Process

Neural Information Processing Systems

In this paper, a Bayesian nonparametric (BNP) model for Baxter permutations (BPs), termed BP process (BPP) is proposed and applied to relational data analysis. The BPs are a well-studied class of permutations, and it has been demonstrated that there is one-to-one correspondence between BPs and several interesting objects including floorplan partitioning (FP), which constitutes a subset of rectangular partitioning (RP). Accordingly, the BPP can be used as an FP model. We combine the BPP with a multi-dimensional extension of the stick-breaking process called the block-breaking process to fill the gap between FP and RP, and obtain a stochastic process on arbitrary RPs. Compared with conventional BNP models for arbitrary RPs, the proposed model is simpler and has a high affinity with Bayesian inference.


The Application of ChatGPT in Responding to Questions Related to the Boston Bowel Preparation Scale

Liu, Xiaoqiang, Wang, Yubin, Huang, Zicheng, Xu, Boming, Zeng, Yilin, Chen, Xinqi, Wang, Zilong, Yang, Enning, Lei, Xiaoxuan, Huang, Yisen, Liu, Xiaobo

arXiv.org Artificial Intelligence

Background: Colonoscopy, a crucial diagnostic tool in gastroenterology, depends heavily on superior bowel preparation. ChatGPT, a large language model with emergent intelligence which also exhibits potential in medical applications. This study aims to assess the accuracy and consistency of ChatGPT in using the Boston Bowel Preparation Scale (BBPS) for colonoscopy assessment. Methods: We retrospectively collected 233 colonoscopy images from 2020 to 2023. These images were evaluated using the BBPS by 3 senior endoscopists and 3 novice endoscopists. Additionally, ChatGPT also assessed these images, having been divided into three groups and undergone specific Fine-tuning. Consistency was evaluated through two rounds of testing. Results: In the initial round, ChatGPT's accuracy varied between 48.93% and 62.66%, trailing the endoscopists' accuracy of 76.68% to 77.83%. Kappa values for ChatGPT was between 0.52 and 0.53, compared to 0.75 to 0.87 for the endoscopists. Conclusion: While ChatGPT shows promise in bowel preparation scoring, it currently does not match the accuracy and consistency of experienced endoscopists. Future research should focus on in-depth Fine-tuning.


Interpreting Images by Propagating Bayesian Beliefs

Weiss, Yair

Neural Information Processing Systems

A central theme of computational vision research has been the realization thatreliable estimation of local scene properties requires propagating measurements across the image. Many authors have therefore suggested solving vision problems using architectures of locally connected units updating their activity in parallel. Unfortunately, theconvergence of traditional relaxation methods on such architectures has proven to be excruciatingly slow and in general they do not guarantee that the stable point will be a global minimum. In this paper we show that an architecture in which Bayesian Beliefs aboutimage properties are propagated between neighboring units yields convergence times which are several orders of magnitude fasterthan traditional methods and avoids local minima. In particular our architecture is non-iterative in the sense of Marr [5]: at every time step, the local estimates at a given location are optimal giventhe information which has already been propagated to that location. We illustrate the algorithm's performance on real images and compare it to several existing methods. 1 Theory The essence of our approach is shown in figure 1. Figure 1a shows the prototypical ill-posed problem: interpolation of a function from sparse data.