Large Language Models (LLM)

A Comparative Study of DSPy Teleprompter Algorithms for Aligning Large Language Models Evaluation Metrics to Human Evaluation ArXiv ID: 2412.15298 “View on arXiv” Authors: Unknown Abstract We argue that the Declarative Self-improving Python (DSPy) optimizers are a way to align the large language model (LLM) prompts and their evaluations to the human annotations. We present a comparative analysis of five teleprompter algorithms, namely, Cooperative Prompt Optimization (COPRO), Multi-Stage Instruction Prompt Optimization (MIPRO), BootstrapFewShot, BootstrapFewShot with Optuna, and K-Nearest Neighbor Few Shot, within the DSPy framework with respect to their ability to align with human evaluations. As a concrete example, we focus on optimizing the prompt to align hallucination detection (using LLM as a judge) to human annotated ground truth labels for a publicly available benchmark dataset. Our experiments demonstrate that optimized prompts can outperform various benchmark methods to detect hallucination, and certain telemprompters outperform the others in at least these experiments. ...

Refined and Segmented Price Sentiment Indices from Survey Comments ArXiv ID: 2411.09937 “View on arXiv” Authors: Unknown Abstract We aim to enhance a price sentiment index and to more precisely understand price trends from the perspective of not only consumers but also businesses. We extract comments related to prices from the Economy Watchers Survey conducted by the Cabinet Office of Japan and classify price trends using a large language model (LLM). We classify whether the survey sample reflects the perspective of consumers or businesses, and whether the comments pertain to goods or services by utilizing information on the fields of comments and the industries of respondents included in the Economy Watchers Survey. From these classified price-related comments, we construct price sentiment indices not only for a general purpose but also for more specific objectives by combining perspectives on consumers and prices, as well as goods and services. It becomes possible to achieve a more accurate classification of price directions by employing a LLM for classification. Furthermore, integrating the outputs of multiple LLMs suggests the potential for the better performance of the classification. The use of more accurately classified comments allows for the construction of an index with a higher correlation to existing indices than previous studies. We demonstrate that the correlation of the price index for consumers, which has a larger sample size, is further enhanced by selecting comments for aggregation based on the industry of the survey respondents. ...

FinRobot: AI Agent for Equity Research and Valuation with Large Language Models ArXiv ID: 2411.08804 “View on arXiv” Authors: Unknown Abstract As financial markets grow increasingly complex, there is a rising need for automated tools that can effectively assist human analysts in equity research, particularly within sell-side research. While Generative AI (GenAI) has attracted significant attention in this field, existing AI solutions often fall short due to their narrow focus on technical factors and limited capacity for discretionary judgment. These limitations hinder their ability to adapt to new data in real-time and accurately assess risks, which diminishes their practical value for investors. This paper presents FinRobot, the first AI agent framework specifically designed for equity research. FinRobot employs a multi-agent Chain of Thought (CoT) system, integrating both quantitative and qualitative analyses to emulate the comprehensive reasoning of a human analyst. The system is structured around three specialized agents: the Data-CoT Agent, which aggregates diverse data sources for robust financial integration; the Concept-CoT Agent, which mimics an analysts reasoning to generate actionable insights; and the Thesis-CoT Agent, which synthesizes these insights into a coherent investment thesis and report. FinRobot provides thorough company analysis supported by precise numerical data, industry-appropriate valuation metrics, and realistic risk assessments. Its dynamically updatable data pipeline ensures that research remains timely and relevant, adapting seamlessly to new financial information. Unlike existing automated research tools, such as CapitalCube and Wright Reports, FinRobot delivers insights comparable to those produced by major brokerage firms and fundamental research vendors. We open-source FinRobot at \url{“https://github. com/AI4Finance-Foundation/FinRobot”}. ...

Quantifying Qualitative Insights: Leveraging LLMs to Market Predict ArXiv ID: 2411.08404 “View on arXiv” Authors: Unknown Abstract Recent advancements in Large Language Models (LLMs) have the potential to transform financial analytics by integrating numerical and textual data. However, challenges such as insufficient context when fusing multimodal information and the difficulty in measuring the utility of qualitative outputs, which LLMs generate as text, have limited their effectiveness in tasks such as financial forecasting. This study addresses these challenges by leveraging daily reports from securities firms to create high-quality contextual information. The reports are segmented into text-based key factors and combined with numerical data, such as price information, to form context sets. By dynamically updating few-shot examples based on the query time, the sets incorporate the latest information, forming a highly relevant set closely aligned with the query point. Additionally, a crafted prompt is designed to assign scores to the key factors, converting qualitative insights into quantitative results. The derived scores undergo a scaling process, transforming them into real-world values that are used for prediction. Our experiments demonstrate that LLMs outperform time-series models in market forecasting, though challenges such as imperfect reproducibility and limited explainability remain. ...

MoA is All You Need: Building LLM Research Team using Mixture of Agents ArXiv ID: 2409.07487 “View on arXiv” Authors: Unknown Abstract Large Language Models (LLMs) research in the financial domain is particularly complex due to the sheer number of approaches proposed in literature. Retrieval-Augmented Generation (RAG) has emerged as one of the leading methods in the sector due to its inherent groundedness and data source variability. In this work, we introduce a RAG framework called Mixture of Agents (MoA) and demonstrate its viability as a practical, customizable, and highly effective approach for scaling RAG applications. MoA is essentially a layered network of individually customized small language models (Hoffmann et al., 2022) collaborating to answer questions and extract information. While there are many theoretical propositions for such an architecture and even a few libraries for generally applying the structure in practice, there are limited documented studies evaluating the potential of this framework considering real business constraints such as cost and speed. We find that the MoA framework, consisting of small language models (Hoffmann et al., 2022), produces higher quality and more grounded responses across various financial domains that are core to Vanguard’s business while simultaneously maintaining low costs. ...

The Structure of Financial Equity Research Reports – Identification of the Most Frequently Asked Questions in Financial Analyst Reports to Automate Equity Research Using Llama 3 and GPT-4 ArXiv ID: 2407.18327 “View on arXiv” Authors: Unknown Abstract This research dissects financial equity research reports (ERRs) by mapping their content into categories. There is insufficient empirical analysis of the questions answered in ERRs. In particular, it is not understood how frequently certain information appears, what information is considered essential, and what information requires human judgment to distill into an ERR. The study analyzes 72 ERRs sentence-by-sentence, classifying their 4940 sentences into 169 unique question archetypes. We did not predefine the questions but derived them solely from the statements in the ERRs. This approach provides an unbiased view of the content of the observed ERRs. Subsequently, we used public corporate reports to classify the questions’ potential for automation. Answers were labeled “text-extractable” if the answers to the question were accessible in corporate reports. 78.7% of the questions in ERRs can be automated. Those automatable question consist of 48.2% text-extractable (suited to processing by large language models, LLMs) and 30.5% database-extractable questions. Only 21.3% of questions require human judgment to answer. We empirically validate using Llama-3-70B and GPT-4-turbo-2024-04-09 that recent advances in language generation and information extraction enable the automation of approximately 80% of the statements in ERRs. Surprisingly, the models complement each other’s strengths and weaknesses well. The research confirms that the current writing process of ERRs can likely benefit from additional automation, improving quality and efficiency. The research thus allows us to quantify the potential impacts of introducing large language models in the ERR writing process. The full question list, including the archetypes and their frequency, will be made available online after peer review. ...

CatMemo at the FinLLM Challenge Task: Fine-Tuning Large Language Models using Data Fusion in Financial Applications ArXiv ID: 2407.01953 “View on arXiv” Authors: Unknown Abstract The integration of Large Language Models (LLMs) into financial analysis has garnered significant attention in the NLP community. This paper presents our solution to IJCAI-2024 FinLLM challenge, investigating the capabilities of LLMs within three critical areas of financial tasks: financial classification, financial text summarization, and single stock trading. We adopted Llama3-8B and Mistral-7B as base models, fine-tuning them through Parameter Efficient Fine-Tuning (PEFT) and Low-Rank Adaptation (LoRA) approaches. To enhance model performance, we combine datasets from task 1 and task 2 for data fusion. Our approach aims to tackle these diverse tasks in a comprehensive and integrated manner, showcasing LLMs’ capacity to address diverse and complex financial tasks with improved accuracy and decision-making capabilities. ...

A Reflective LLM-based Agent to Guide Zero-shot Cryptocurrency Trading ArXiv ID: 2407.09546 “View on arXiv” Authors: Unknown Abstract The utilization of Large Language Models (LLMs) in financial trading has primarily been concentrated within the stock market, aiding in economic and financial decisions. Yet, the unique opportunities presented by the cryptocurrency market, noted for its on-chain data’s transparency and the critical influence of off-chain signals like news, remain largely untapped by LLMs. This work aims to bridge the gap by developing an LLM-based trading agent, CryptoTrade, which uniquely combines the analysis of on-chain and off-chain data. This approach leverages the transparency and immutability of on-chain data, as well as the timeliness and influence of off-chain signals, providing a comprehensive overview of the cryptocurrency market. CryptoTrade incorporates a reflective mechanism specifically engineered to refine its daily trading decisions by analyzing the outcomes of prior trading decisions. This research makes two significant contributions. Firstly, it broadens the applicability of LLMs to the domain of cryptocurrency trading. Secondly, it establishes a benchmark for cryptocurrency trading strategies. Through extensive experiments, CryptoTrade has demonstrated superior performance in maximizing returns compared to traditional trading strategies and time-series baselines across various cryptocurrencies and market conditions. Our code and data are available at \url{“https://anonymous.4open.science/r/CryptoTrade-Public-92FC/"}. ...

New intelligent empowerment for digital transformation ArXiv ID: 2406.18440 “View on arXiv” Authors: Unknown Abstract This study proposes an innovative evaluation method based on large language models (LLMs) specifically designed to measure the digital transformation (DT) process of enterprises. By analyzing the annual reports of 4407 companies listed on the New York Stock Exchange and Nasdaq from 2005 to 2022, a comprehensive set of DT indicators was constructed. The findings revealed that DT significantly improves a company’s financial performance, however, different digital technologies exhibit varying effects on financial performance. Specifically, blockchain technology has a relatively limited positive impact on financial performance. In addition, this study further discovered that DT can promote the growth of financial performance by enhancing operational efficiency and reducing costs. This study provides a novel DT evaluation tool for the academic community, while also expanding the application scope of generative artificial intelligence technology in economic research. ...

FNSPID: A Comprehensive Financial News Dataset in Time Series ArXiv ID: 2402.06698 “View on arXiv” Authors: Unknown Abstract Financial market predictions utilize historical data to anticipate future stock prices and market trends. Traditionally, these predictions have focused on the statistical analysis of quantitative factors, such as stock prices, trading volumes, inflation rates, and changes in industrial production. Recent advancements in large language models motivate the integrated financial analysis of both sentiment data, particularly market news, and numerical factors. Nonetheless, this methodology frequently encounters constraints due to the paucity of extensive datasets that amalgamate both quantitative and qualitative sentiment analyses. To address this challenge, we introduce a large-scale financial dataset, namely, Financial News and Stock Price Integration Dataset (FNSPID). It comprises 29.7 million stock prices and 15.7 million time-aligned financial news records for 4,775 S&P500 companies, covering the period from 1999 to 2023, sourced from 4 stock market news websites. We demonstrate that FNSPID excels existing stock market datasets in scale and diversity while uniquely incorporating sentiment information. Through financial analysis experiments on FNSPID, we propose: (1) the dataset’s size and quality significantly boost market prediction accuracy; (2) adding sentiment scores modestly enhances performance on the transformer-based model; (3) a reproducible procedure that can update the dataset. Completed work, code, documentation, and examples are available at github.com/Zdong104/FNSPID. FNSPID offers unprecedented opportunities for the financial research community to advance predictive modeling and analysis. ...