Search Results (59)

This systematic literature review explores the application of artificial intelligence (AI) and machine learning (ML) in financial market forecasting, with a focus on four asset classes: equities, cryptocurrencies, commodities, and foreign exchange markets. Guided by the PRISMA methodology, the study identifies the most widely used predictive models, particularly LSTM, GRU, XGBoost, and hybrid deep learning architectures, as well as key evaluation metrics, such as RMSE and MAPE. The findings confirm that AI-based approaches, especially neural networks, outperform traditional statistical methods in capturing non-linear and high-dimensional dynamics. However, the analysis also reveals several critical research gaps. Most notably, current models are rarely embedded into real or simulated trading strategies, limiting their practical applicability. Furthermore, the sensitivity of widely used metrics like MAPE to volatility remains underexplored, particularly in highly unstable environments such as crypto markets. Temporal robustness is also a concern, as many studies fail to validate their models across different market regimes. While data covering one to ten years is most common, few studies assess performance stability over time. By highlighting these limitations, this review not only synthesizes the current state of the art but also outlines essential directions for future research. Specifically, it calls for greater emphasis on model interpretability, strategy-level evaluation, and volatility-aware validation frameworks, thereby contributing to the advancement of AI’s real-world utility in financial forecasting. Full article

Navigating the complexity of petroleum futures markets—marked by extreme volatility, geopolitical uncertainty, and macroeconomic shocks—demands adaptive and risk-sensitive strategies. This paper explores an Adaptive Risk-sensitive Transformer-based Deep Reinforcement Learning (ART-DRL) framework to improve portfolio optimization in commodity futures trading. While deep reinforcement learning (DRL) has been applied in equities and forex, its use in commodities remains underexplored. We evaluate DRL models, including Deep Q-Networks (DQN), Proximal Policy Optimization (PPO), Advantage Actor-Critic (A2C), and Deep Deterministic Policy Gradient (DDPG), integrating dynamic reward functions and asset-specific optimization. Empirical results show improvements in risk-adjusted performance, with an annualized return of 1.353, a Sharpe Ratio of 4.340, and a Sortino Ratio of 57.766. Although the return is below DQN (1.476), the proposed model achieves better stability and risk control. Notably, the models demonstrate resilience by learning from historical periods of extreme volatility, including the COVID-19 pandemic (2020–2021) and geopolitical shocks such as the Russia–Ukraine conflict (2022), despite testing commencing in January 2023. This research offers a practical, data-driven framework for risk-sensitive decision-making in commodities, showing how machine learning can support portfolio management under volatile market conditions. Full article

Reforestation is widely promoted as a nature-based solution for climate change, yet its unintended consequences, such as deforestation leakage, remain under-investigated. This study provides empirical evidence of reforestation-induced leakage in the Brazilian Amazon, using municipality-level panel data from 2000 to 2023 and spatial Durbin panel models to estimate both the magnitude and spatial reach of agricultural displacement. Despite the positive local effects of reforestation projects, we found a significant displacement of deforestation to the vicinity of municipalities. We estimated a statistically significant deforestation leakage effect of approximately 12% from the reforested area, due to the agricultural displacement of cattle ranching activities. Spatial spillovers are strongest within a 150 km radius and within two years after reforestation onset. Sensitivity tests using alternative spatial weight matrices, including distance decay and land rent-weighted specifications, confirm the robustness of these findings. Livestock intensification, proxied by cattle stocking rates, does not significantly mitigate displacement effects, challenging assumptions about land sparing benefits. These results suggest that current carbon market protocols (e.g., Verra, ART-TREES) may improve their leakage analysis to avoid under- or over-estimating net carbon benefits. Incorporating spatial econometric evidence into offset methodologies and reforestation planning can improve climate policy integrity and reduce unintended environmental trade-offs. Full article

Urban air mobility (UAM) is expected to provide environmental benefits while enhancing transportation for citizens and businesses, particularly in commercial and emergency medical applications. The rapid development of electric vertical take-off and landing (eVTOL) aircraft has demonstrated the potential to introduce new technological capabilities to the market, fostering visions of widespread and diverse UAM applications. This paper reviews state-of-the-art occupant safety for personal drones and examines existing occupant protection methods in the aircraft. The study serves as a guide for stakeholders, including regulators, manufacturers, researchers, policymakers, and industry professionals—by providing insights into the regulatory landscape and safety assurance frameworks for eVTOL aircraft in UAM applications. Furthermore, we present a functional hazard assessment (FHA) conducted on a reference concept, detailing the process, decision-making considerations, and key variations. The analysis illustrates the FHA methodology while discussing the trade-offs involved in safety evaluations. Additionally, we provide a summary and a featured description of current eVTOL aircraft, highlighting their key characteristics and technological advancements. Full article

This study provides empirical evidence that cryptocurrency market movements are influenced by sentiment extracted from social media. Using a high frequency dataset covering four major cryptocurrencies (Bitcoin, Ether, Litecoin, and Ripple) from October 2017 to September 2021, we apply state-of-the-art natural language processing techniques on tweets from influential Twitter accounts. We classify sentiment into positive, negative, and neutral categories and analyze its effects on log returns, liquidity, and price jumps by examining market reactions around tweet occurrences. Our findings show that tweets significantly impact trading volume and liquidity: neutral sentiment tweets enhance liquidity consistently, negative sentiments prompt immediate volatility spikes, and positive sentiments exert a delayed yet lasting influence on the market. This highlights the critical role of social media sentiment in influencing intraday market dynamics and extends the research on sentiment-driven market efficiency. Full article

Circular economy theorists and advocates typically describe traditional market economies as linear “take, make, use and dispose” systems. Various policy interventions, from green taxes to extended producer responsibility, are therefore deemed essential to ensure the systematic (re)introduction of residuals, secondary materials and components in manufacturing activities. By contrast, many nineteenth- and early twentieth-century writers documented how the profit motive, long-distance trade and actors now largely absent from present-day circularity discussions (e.g., waste dealers and brokers) spontaneously created ever more value out of the recovery of residuals and waste. These opposite assessments and underlying perspectives are perhaps best illustrated in the nineteenth classical liberal and early twenty-first century interventionist writings on circularity of Fellows, members and collaborators of the near tricentennial British Royal Society for the Encouragement of Arts, Manufactures and Commerce. This article summarizes their respective contributions and compares their stance on market institutions, design, intermediaries, extended producer responsibility and long-distance trade. Some hypotheses as to the sources of their analytical discrepancies and current beliefs on resource recovery are then discussed in more detail. A final suggestion is made that, if the analysis offered by early contributors is more correct, then perhaps the most important step towards greater circularity is regulatory reform (or deregulation) that would facilitate the spontaneous recovery of residuals and their processing in the most suitable, if sometimes more distant, locations. Full article

As a research objective in quantitative trading, the aim of portfolio management is to find the optimal allocation of funds by following the dynamic changes in stock prices. The principal issue with current portfolio management methods is their narrow focus on a single data source, neglecting the changes or news arising from sectors. Methods for integrating news data frequently face challenges with regard to quantifying text data and embedding them into portfolio models; this process often necessitates considerable manual labeling. To address these issues, we proposed a sector rotation portfolio management approach based on deep reinforcement learning (DRL) via multi-source information. The multi-source information includes the temporal data of sector and stock features, as well as news data. In terms of structure, in this method, a dual-layer reinforcement learning structure is deployed, comprising a multi-agent sector layer and a graph convolution layer. The former learns the trend of sectors, while the latter learns the connections between stocks in sectors, and the impact of news on sectors is integrated through large language models without manual labeling or fusing output information of other modules to provide the final portfolio management scheme. The results of simulation experiments on the Chinese and US (United States) stock markets show that our method demonstrates significant improvements over multiple state-of-the-art approaches. Full article

We develop a deep reinforcement learning (RL) framework for an optimal market-making (MM) trading problem, specifically focusing on price processes with semi-Markov and Hawkes Jump-Diffusion dynamics. We begin by discussing the basics of RL and the deep RL framework used; we deployed the state-of-the-art Soft Actor–Critic (SAC) algorithm for the deep learning part. The SAC algorithm is an off-policy entropy maximization algorithm more suitable for tackling complex, high-dimensional problems with continuous state and action spaces, like those in optimal market-making (MM). We introduce the optimal MM problem considered, where we detail all the deterministic and stochastic processes that go into setting up an environment to simulate this strategy. Here, we also provide an in-depth overview of the jump-diffusion pricing dynamics used and our method for dealing with adverse selection within the limit order book, and we highlight the working parts of our optimization problem. Next, we discuss the training and testing results, where we provide visuals of how important deterministic and stochastic processes such as the bid/ask prices, trade executions, inventory, and the reward function evolved. Our study includes an analysis of simulated and real data. We include a discussion on the limitations of these results, which are important points for most diffusion style models in this setting. Full article

Accurate prediction of the Sharpe ratio, a key metric for risk-adjusted returns in financial markets, remains a significant challenge due to the complex and stochastic nature of stock price movements. This paper introduces a novel deep learning model, the Temporal Fusion Transformer with Adaptive Sharpe Ratio Optimization (TFT-ASRO), designed to address this challenge. The model incorporates real-time market sensor data and financial indicators as input signals, leveraging multiple data streams including price sensors, volume sensors, and market sentiment sensors to capture the complete market state. Using a comprehensive dataset of US historical stock prices and earnings data, we demonstrate that TFT-ASRO outperforms traditional methods and existing deep learning models in predicting Sharpe ratios across various time horizons. The model’s multi-task learning framework, which simultaneously predicts returns and volatility, provides a more nuanced understanding of risk-adjusted performance. Furthermore, our adaptive optimization approach effectively balances the trade-off between return maximization and risk minimization, leading to more robust predictions. Empirical results show that TFT-ASRO achieves a $18\%$ improvement in Sharpe ratio prediction accuracy compared to state-of-the-art baselines, with particularly strong performance in volatile market conditions. The model also demonstrates superior uncertainty quantification, providing reliable confidence intervals for its predictions. These findings have significant implications for portfolio management and investment strategy optimization, offering a powerful tool for financial decision-makers in the era of data-driven investing. Full article

The paper investigates the application of advanced machine learning (ML) methodologies, with a particular emphasis on state-of-the-art deep learning models, to predict financial market dynamics and maximize profitability through algorithmic trading strategies. The study compares the predictive capabilities and behavioral characteristics of traditional machine learning approaches, such as logistic regression and support vector machines, with those of highly sophisticated deep learning architectures, including Recurrent Neural Networks (RNNs), Long Short-Term Memory (LSTM) networks, and Gated Recurrent Units (GRUs). The findings underscore the fundamental distinctions between these methodologies, with deeply trained models exhibiting markedly different predictive behaviors and performance, particularly in capturing complex temporal patterns within financial data. A cornerstone of the paper is the introduction and rigorous analysis of a framework to evaluate models, by means of the SAFE framework (Sustainability, Accuracy, Fairness, and Explainability). The framework is designed to address the opacity of black-box ML models by systematically evaluating their behavior across a set of critical dimensions. It also demonstrates how models’ predictive outputs align with the observed data, thereby reinforcing their reliability and robustness. The paper leverages historical stock price data from International Business Machines Corporation (IBM). The dataset is partitioned into a training phase during which the models are calibrated, and a validation phase, used to evaluate the predictive performance of the generated trading signals. The study addresses two primary machine learning tasks: regression and classification. Classical models are utilized for classification tasks, with their outputs directly interpreted as trading signals, while advanced deep learning models are employed for regression, with predictions of future stock prices further processed into actionable trading strategies. To evaluate the effectiveness of each strategy, rigorous backtesting is conducted, incorporating visual representations such as equity curves to assess profitability and key risk metrics like maximum drawdown for risk management. Supplementary performance indicators, including hit rates and the incidence of false positions, are analyzed alongside the equity curves to provide a holistic assessment of each model’s performance. This comprehensive evaluation not only highlights the superiority of cutting-edge deep learning models in predicting financial market trends but also demonstrates the pivotal role of the SAFE framework in ensuring that machine learning models remain trustworthy, interpretable, and aligned with ethical considerations. Full article

The increasing adoption of renewable energy sources and the emergence of distributed generation have significantly transformed the traditional energy landscape, leading to the rise of local energy markets. These markets facilitate decentralized energy trading among different market participants at the community level, fostering greater energy autonomy and sustainability. As local energy markets gain momentum, the application of artificial intelligence techniques, particularly reinforcement learning, has gained substantial interest in optimizing energy trading strategies by interacting with the environment and maximizing the rewards by addressing the decision complexities by learning. This paper comprehensively reviews the different energy trading projects initiated at the global level and machine learning approaches and solution strategies for local energy markets. State-of-the-art reinforcement learning algorithms are classified into model-free and model-based methods. This classification examines various algorithms for energy transactions considering the agent type, learning methods, policy, state space, action space, and action selection for state, action, and reward function outputs. The findings of this work will serve as a valuable resource for researchers, stakeholders, and policymakers to accelerate the adoption of the local energy market for a more efficient, sustainable, and resilient energy future. Full article

The increasing number of active energy consumers, also known as energy prosumers, is dramatically changing the electricity system. New products and services that adopt the concept of dynamic pricing are available to the market, where demand and price forecasting are applied to determine schedule loads and prices. Throughout this manuscript, a novel framework for energy trading among prosumers is introduced. Rather than solving the problem in a centralized manner, the proposed orchestrator relies on a distributed game theory to determine optimal bids. Experimental results validate the efficiency of proposed solution, since it achieves average energy cost reduction of 2×, as compared to the associated cost from the main grid. Additionally, the hardware implementation of the introduced framework onto a low-cost embedded device achieves near real-time operation with comparable performance to state-of-the-art computational intensive solvers. Full article

Accurate and reliable PV power probabilistic-forecasting results can help grid operators and market participants better understand and cope with PV energy volatility and uncertainty and improve the efficiency of energy dispatch and operation, which plays an important role in application scenarios such as power market trading, risk management, and grid scheduling. In this paper, an innovative deep learning quantile regression ultra-short-term PV power-forecasting method is proposed. This method employs a two-branch deep learning architecture to forecast the conditional quantile of PV power; one branch is a QR-based stacked conventional convolutional neural network (QR_CNN), and the other is a QR-based temporal convolutional network (QR_TCN). The stacked CNN is used to focus on learning short-term local dependencies in PV power sequences, and the TCN is used to learn long-term temporal constraints between multi-feature data. These two branches extract different features from input data with different prior knowledge. By jointly training the two branches, the model is able to learn the probability distribution of PV power and obtain discrete conditional quantile forecasts of PV power in the ultra-short term. Then, based on these conditional quantile forecasts, a kernel density estimation method is used to estimate the PV power probability density function. The proposed method innovatively employs two ways of a priori knowledge injection: constructing a differential sequence of historical power as an input feature to provide more information about the ultrashort-term dynamics of the PV power and, at the same time, dividing it, together with all the other features, into two sets of inputs that contain different a priori features according to the demand of the forecasting task; and the dual-branching model architecture is designed to deeply match the data of the two sets of input features to the corresponding branching model computational mechanisms. The two a priori knowledge injection methods provide more effective features for the model and improve the forecasting performance and understandability of the model. The performance of the proposed model in point forecasting, interval forecasting, and probabilistic forecasting is comprehensively evaluated through the case of a real PV plant. The experimental results show that the proposed model performs well on the task of ultra-short-term PV power probabilistic forecasting and outperforms other state-of-the-art deep learning models in the field combined with QR. The proposed method in this paper can provide technical support for application scenarios such as energy scheduling, market trading, and risk management on the ultra-short-term time scale of the power system. Full article

With the soaring interest in art as an alternative investment approach and an asset class, there has been a remarkable rise in the volume of artwork transactions globally. However, trading in the art market differs from the traditional financial market; the cost of taxes, logistics, storage, and other transaction services is enormous for collectors, stimulating the emergence of related businesses, such as warehousing, bonded exhibitions, and art financial services. As an exceptional area serving the offshore economy, art freeports have become an essential venue for art trading and a ‘one-stop-shop’ centre that converges all art market participants. This article critically analyses the current literature and conducts empirical research on Shanghai FTZ International Culture Investment and Development Co., Ltd. (FTZART). It can be concluded that the current research on art freeports is limited and excludes FTZART from those that specialise in storing artworks, overlooking its potential influence in the Asian market. The art freeport has distinctive features that differ from traditional freeport models, and the context, business model, and operations of FTZART match these characteristics. Therefore, as a hub in the art market, the global art freeport agenda should not overlook FTZART, and it is essential to complement this gap in knowledge. Full article

Artifacts pertaining to Buddhist culture are often studied in relation to their circulation from India throughout the rest of Asia; however, many traveled to Europe during the last few centuries as trade commodities and pieces for the art market, losing any devotional purpose in favor of a specific aesthetic sensitivity that was typically adapted to Western taste to appeal to collectors. This article presents a technical study of seven polychrome wooden sculptures from the Museo d’Arte Orientale (MAO) in Turin, Italy. Originally from China, these objects are generally attributed to the late Ming–early Qing dynasties (16th–18th centuries) based merely on stylistic and iconographic considerations. Scientific analysis sought to expand the available knowledge on their constituting materials and fabrication techniques, to address questions on their authenticity, to assess their state of preservation, and to trace the history of transformations they have undergone while transitioning from devotional objects to private collection and museum artwork. By delving into the sculptures’ intricate paint stratigraphy, the results were also key to guiding treatment choices. The outcomes of this study were featured in the MAO exhibition “Buddha10. A Fragmented Display on Buddhist Visual Evolution” (October 2022–September 2023). Full article