financial analysts

Abstract: Machine learning models process large amounts of data, and Principal Component Analysis (PCA) is a widely used technique to reduce the dimensionality of the data and extract useful features. In practice, datasets often change over time (data drift) and/or arrive one sample at a time (streaming data), making it infeasible to process the entire dataset at once in batch mode. Real-world data also often contains nonlinear patterns, which traditional PCA cannot extract. Kernel PCA addresses this by implicitly mapping samples into a Reproducing Kernel Hilbert Space (RKHS). Raw data also often contains outliers, which can have an outsized effect on the estimated subspace unless the algorithm is made robust. However, existing online robust kernel PCA algorithms are designed to converge to a subspace that is assumed to be fixed, and gradient-descent-based updates lose their effectiveness at tracking further changes once this initial alignment is achieved. This paper introduces a rotation-based update mechanism, which updates the subspace estimate by rotating it toward each new incoming feature vector in Reproducing Kernel Hilbert Space, rather than relying on gradient descent alone. We present two complementary rotation strategies, and show that the extent of rotation can be moderated by a robust influence function to mitigate the effect of outliers. Through experiments on synthetic streaming data with a known ground-truth subspace, we show that per-sample rotations converge faster than gradient descent alone, demonstrating an effective mechanism for dynamically tracking a nonlinear subspace in streaming data.

Abstract: Text-to-Time Series Generation (Text-to-TS) provides a promising paradigm for synthesizing time series from natural language, enabling scenario-specific generation when real observations are scarce or costly to acquire. However, existing methods typically lack an explicit mechanism for deriving generation logic from textual descriptions to guide time series synthesis. In this paper, we propose CodeTS, a verifiable framework that uses code as an intermediate generation interface, reformulating Text-to-TS generation as a Text-to-Code-to-TS process. CodeTS first maps textual temporal descriptions into an explicit code space, where executable code specifies how textual requirements shape target temporal patterns, and then obtains the time series through code execution. To learn this code generation process reliably without real code annotations, CodeTS constructs aligned Text-Code-TS triplets from structured temporal attributes for supervised initialization. More importantly, we further design multi-stage execution-based rewards that verify format validity, code executability, and time series quality, enabling real Text-TS pairs to provide training signals for Reinforcement Learning with Verifiable Rewards (RLVR). Extensive experiments on eight benchmarks across short, medium, and long generation lengths demonstrate that CodeTS provides a strong zero-shot solution for Text-to-TS generation, outperforming LLM-based baselines and achieving better averaged results than supervised generative baselines trained on the target datasets.

Abstract: Environmental, Social, and Governance (ESG) reporting is critical for corporate accountability, with Large Language Models (LLMs) and Retrieval-Augmented Generation (RAG) offering strong potential to automate KPI extraction. However, open-source LLM performance in domain-specific ESG tasks remains insufficiently understood. This paper evaluates open-source LLMs in ESG contexts using a structured framework and evaluation resource based on 498 real-world ESG reports from EU-listed companies (2010-2024). We evaluate seven open-source models (2B to 30B parameters) -- glm-4.7-flash, nemotron-3-nano:4b, qwen3:4b-instruct, gemma3:4b, gemma4:e4b, gemma4:e2b, and ministral-3:8b -- using 100 persona-based synthetic QA pairs covering ESG information needs. System performance is assessed via RAGAS metrics, including contextual recall, precision, relevance, faithfulness, answer relevancy, and factual correctness. Results show notable performance variations across architectures. Retrieval performance is strong across models (context recall around 0.58-0.61, context precision around 0.78-0.81, context relevance 0.965-0.985). Generation diverges most on faithfulness (0.607-0.822) and least on answer relevancy (0.760-0.881): glm-4.7-flash leads in faithfulness (0.822), qwen3 in factual correctness (0.449), and ministral-3 in answer relevancy (0.881). Low overall factual correctness (0.387-0.449) highlights the need for domain-specific fine-tuning. This work provides data-driven guidance for deploying open-source models in ESG reporting.

Abstract: Stock price prediction remains challenging due to the non-stationary and noisy nature of financial time series. Existing deep learning models often rely on rigid decision-level fusion, ad hoc hyperparameter tuning, and compressed final-layer outputs, causing information loss, overfitting, and limited cross-market generalization. We propose VertiFuseX, a hybrid LSTM architecture using penultimate-layer vertical fusion of multi-scale temporal representations. VertiFuseX stacks and reweights penultimate features from LSTM, Bi-LSTM, and St-LSTM branches, integrates a parallel DNN stream, and jointly optimizes all components via backpropagation under a fixed hyperparameter configuration. This preserves richer intermediate temporal information across scales. Evaluated on 15 years (2010-2024) of closing prices from 10 global equity indices using strict chronological out-of-sample testing with the final 365 trading days held out, VertiFuseX achieves 30-54% MAPE reductions and over 40% improvements in MAE and RMSE versus LSTM-based baselines, and outperforms seven state-of-the-art models across 33 metric-dataset comparisons. Ablation studies confirm penultimate-layer fusion drives these gains over final-layer fusion and decision-level ensembling. Gradient-based saliency analysis shows consistent emphasis on mid-range dependencies at lags 9-15 days. Economic validation via algorithmic trading simulation under extreme market regimes shows reduced maximum drawdowns and superior risk-adjusted returns. With 675k parameters, a 2.6 MB memory footprint, and 1.5 ms/sample inference latency, VertiFuseX offers a lightweight, interpretable, deployment-ready framework for robust financial forecasting.

Abstract: Recent advances in explaining time series (TS) models have produced methods that identify which past values a prediction depends on. However, most existing methods return a single importance vector, assuming that every predicted step depends on the same past values. In this paper, we show that this assumption does not hold, as different forecast steps depend on different past values. Motivated by this observation, we propose Horizon-Resolved eXplanation (HRX), which adds a horizon axis to the explanation, so that every forecast step receives its own importance map. HRX is a simple yet effective plug-in framework with three components: 1) an estimator that reads these maps out of any differentiable forecaster without modifying the TS backbone, 2) an evaluation protocol that validates the horizon axis by measuring how much a single forecast step changes when the inputs an importance map ranks highest are removed, and 3) a rank criterion that predicts in advance whether the axis is worth resolving on a given TS. We further show that this step-wise dependence is low-dimensional, as the explanations of all steps are built from a few shared maps whose number does not grow with the forecast length. Extensive experiments across various backbones and datasets show that the improvement comes from the horizon axis and holds for estimators of previous explanation methods. Code is available at https://github.com/seunghan96/HRX.

Abstract: In hybrid forecasting, a language model is often one of several available signals. A system may already have a market, crowd, or statistical forecast and must decide whether the model adds useful information or should be ignored. The relevant target is therefore not standalone model accuracy, but relative competence, defined as the model's marginal value beyond the available external forecast. Under Brier loss, we characterize when model disagreement can improve an external forecast and derive the gain from using domain-specific rather than global pooling weights. We then introduce a competence gate that estimates domain-level source weights from resolved outcomes, shrinks uncertain estimates toward a global weight, and recalibrates the pooled forecast. Across 2,357 resolved binary questions and five language models, the gate improves the main external baseline from 0.0771 to 0.0732 Brier and significantly outperforms global forecast combinations. The gain remains significant under leakage controls and against a leakage-safe time-series prior on the pooled structured set, with separate evidence on FRED. In contrast, the gate gives no significant improvement on the official ForecastBench market subset, where it largely defers to the market. Across four Qwen models, verbal confidence does not reliably identify when the model outperforms the external forecast, while outcome-estimated competence supports better abstention decisions. These results provide a practical approach for selective model use based on measured marginal value.

Abstract: High-dimensional dense text embeddings and large language models face real obstacles in financial-disclosure analysis: context-window limits, hallucination risk, high computational cost, and the arbitrary rotation of vector spaces across independently trained models. We present a training-free, alignment-free framework for corporate intelligence built on deterministic sparse seed vectors. Hashing word strings into a fixed high-dimensional basis places all documents and all temporal epochs in a common coordinate system by construction, removing any need for training or alignment. Accumulating these seed vectors across sentence contexts yields corpus-specific semantic signatures that compose linearly, supporting sub-second document comparison, issuer fingerprinting, tracking of how an issuer's vocabulary shifts between filings, and thematic sentence extraction, all on ordinary CPU hardware. Demonstrating the approach on a multi-year corpus of SEC filings (10-K, 10-Q, 8-K), we show how material corporate events, among them Boeing's 737 MAX crisis, Intel's supply-chain disruptions, and Bunge's acquisition of Viterra, emerge as distinct, interpretable semantic profiles, each traceable to the exact source sentences that produced it, with no domain-specific training and no LLM inference.

Abstract: When forecasting a firm's future financial performance, alternative data - data collected from non-traditional sources such as consumer transactions, web traffic, and prediction markets - can provide timely signals about firms' operating activities and broader market conditions. These signals may reveal information that is not captured by traditional public sources and can therefore provide complementary information for forecasting firms' future financial performance. However, firm-level alternative data often have limited historical coverage, are relevant only to specific prediction targets or subsets of firms, and are distributed across numerous heterogeneous channels, making them difficult to incorporate flexibly into conventional forecasting approaches. Meanwhile, large language models (LLMs) can interpret instructions, learn from in-context examples, and generate predictions by combining heterogeneous information without task-specific parameter updates. Motivated by this potential flexibility, we investigate whether an LLM can forecast firm performance by integrating alternative data with other financial information through in-context learning. We propose a two-agent framework that first identifies the firms for which each alternative data channel is likely to be informative and then predicts revenue using firm- and channel-specific context. We evaluate the framework across four commercial alternative data channels. In our experiments, adding alternative data in context alongside other financial information improves the LLM's forecasting relative to either source alone, and these forecasts are more accurate than those of standard forecasting baselines. These findings suggest that LLMs provide a flexible and practical approach to integrating alternative data with heterogeneous financial information.

Abstract: This feature article provides an overview of the theoretical foundations for coVariance neural networks (VNNs), i.e., graph neural networks (GNNs) operating on covariance matrices as graphs. Covariance matrices are ubiquitous across domains, and hence, the deployment of GNNs often leverages graphs of pairwise statistical dependencies. Existing theoretical contributions on GNNs consider abstract graph representations and cannot accommodate the data-driven nuances associated with covariance matrices. This tutorial brings into focus various novel theoretical insights via mathematical analyses of VNNs that have broad signal processing implications, including: (i) a conceptual equivalence between VNNs and principal component analysis (PCA)-based information processing; (ii) refined stability bounds on predictive outcomes in the presence of finite sample-induced covariance matrix perturbations; and (iii) refined characterization of transferability of VNNs across multiscale datasets. The theoretical insights discussed herein provide the underlying principles and justification towards adopting VNNs over workhorse PCA-based learning pipelines, in applications where covariance matrices are useful descriptors of data structure. We also convey how impact of these foundational advances permeates to \textit{principled} designs and applications of learning methods across broad domains where covariance matrices emerge. Notably, we elucidate the conceptual insights facilitated by VNNs to the specific task of characterizing brain age gap for neurodegenerative conditions using neuroimaging datasets, a timely problem in computational neuroscience. Broader impacts to other application domains are discussed as well.

Abstract: Multi-scale modeling has become an effective approach for long-term time series forecasting, capturing temporal patterns that range from fine-grained local dynamics to coarse global trends. Representations across these temporal scales are inherently hierarchical, with coarser scales abstracting and aggregating information from finer ones. While existing approaches readily exchange information across these scales, the hierarchy itself is typically left as an emergent byproduct of such interactions rather than captured as a geometric structure in its own right. In this paper, we introduce HypLTSF, a framework that endows the multi-scale hierarchy with a concrete geometric form by embedding scale-wise representations into the Poincaré ball, whose exponentially expanding volume naturally accommodates hierarchical structures. To align this geometry with the temporal hierarchy, HypLTSF imposes two constraints: (1) a radial constraint that orders embeddings by their level of abstraction, and (2) an angular constraint that groups fine-scale patterns sharing a common coarser-scale ancestor. Extensive experiments on long-term time series forecasting benchmarks show that HypLTSF achieves state-of-the-art performance, suggesting that explicitly modeling the multi-scale hierarchy as a geometric structure is effective for forecasting.

Abstract: Suppose we are given an ordered sequence of independent data whose distribution changes $K$ times at unknown locations, for some unknown $K \geq 0$. In this paper, we study the problem of performing distribution-free inference on $K$. First, we show an impossibility result: any distribution-free upper confidence bound on $K$ must be trivial and uninformative. Then, using conformal $p$-values, and under only the assumption that the data segments induced by the changepoints are exchangeable (within themselves) and mutually independent, we construct a finite-sample valid lower confidence bound on $K$, which we call the Conformal LOwer bound on Changepoint Count (CLOCC). We show that CLOCC is the only feasible way to provide a lower bound on $K$ under the stated assumptions, a property we refer to as its universality. We provide practical guidelines for choosing score functions that yield efficient and tight lower bounds. We evaluate CLOCC in several synthetic and real-data experiments, where it provides informative lower bounds on $K$, demonstrating its practical applicability.