Application of Machine Learning in Predicting Extreme Volatility in Financial Markets: Based on Unstructured Data

Authors

  • Chenwei Gong Henry Samueli School of Engineering, Department of Computer, University of California, Los Angeles, United States of America
  • Yanyi Zhong Graziadio Business School, Pepperdine University, Santa Ana, United States of America
  • Shenghan Zhao The Department of Economics, Cornell University, New York, United States of America

DOI:

https://doi.org/10.5281/zenodo.14177472

Keywords:

generative ai, artificial intelligence, bim, digital twins, extended reality (xr), internet of things (iot)

Abstract

Sentiment analysis is an important tool for revealing insights and shaping our understanding of market movements from financial articles, news, and social media. Despite their impressive abilities in financial natural language processing (NLP), large language models (LLMs) still have difficulties in accurately interpreting numerical values and grasping financial context, limiting their effectiveness in predicting financial sentiment. This article introduces a simple and effective instruction-tuning method to solve these problems. We have made significant progress in financial sentiment analysis by converting small amounts of supervised financial sentiment analysis data into command data and using this approach to fine-tune a generic LLM. In experiments, our approach outperforms state-of-the-art supervised sentiment analysis models and widely used LLMs such as ChatGPT and LLaMAs, especially when numerical and contextual understanding is critical.

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Published

2024-11-18

How to Cite

Gong, C., Zhong, Y., & Zhao, S. (2024). Application of Machine Learning in Predicting Extreme Volatility in Financial Markets: Based on Unstructured Data. Applied Science and Engineering Journal for Advanced Research, 3(6), 15–24. https://doi.org/10.5281/zenodo.14177472