Multiobjective Evolutionary Optimization of Type-2 Fuzzy Rule-Based Systems for Financial Data Classification

Classification techniques are becoming essential in the financial world for reducing risks and possible disasters. Managers are interested in not only high accuracy, but in interpretability and transparency as well. It is widely accepted now that the comprehension of how inputs and outputs are related to each other is crucial for taking operative and strategic decisions. Furthermore, inputs are often affected by contextual factors and characterized by a high level of uncertainty. In addition, financial data are usually highly skewed toward the majority class. With the aim of achieving high accuracies, preserving the interpretability, and managing uncertain and unbalanced data, this paper presents a novel method to deal with financial data classification by adopting type-2 fuzzy rule-based classifiers (FRBCs) generated from data by a multiobjective evolutionary algorithm (MOEA). The classifiers employ an approach, denoted as scaled dominance, for defining rule weights in such a way to help minority classes to be correctly classified. In particular, we have extended PAES-RCS, an MOEA-based approach to learn concurrently the rule and data bases of FRBCs, for managing both interval type-2 fuzzy sets and unbalanced datasets. To the best of our knowledge, this is the first work that generates type-2 FRBCs by concurrently maximizing accuracy and minimizing the number of rules and the rule length with the objective of producing interpretable models of real-world skewed and incomplete financial datasets. The rule bases are generated by exploiting a rule and condition selection (RCS) approach, which selects a reduced number of rules from a heuristically generated rule base and a reduced number of conditions for each selected rule during the evolutionary process. The weight associated with each rule is scaled by the scaled dominance approach on the fuzzy frequency of the output class, in order to give a higher weight to the minority class. As regards the data base learning, the membership function parameters of the interval type-2 fuzzy sets used in the rules are learned concurrently to the application of RCS. Unbalanced datasets are managed by using, in addition to complexity, selectivity and specificity as objectives of the MOEA rather than only the classification rate. We tested our approach, named IT2-PAES-RCS, on 11 financial datasets and compared our results with the ones obtained by the original PAES-RCS with three objectives and with and without scaled dominance, the FRBCs, fuzzy association rule-based classification model for high-dimensional dataset (FARC-HD) and fuzzy unordered rules induction algorithm (FURIA), the classical C4.5 decision tree algorithm, and its cost-sensitive version. Using nonparametric statistical tests, we will show that IT2-PAES-RCS generates FRBCs with, on average, accuracy statistically comparable with and complexity lower than the ones generated by the two versions of the original PAES-RCS. Further, the FRBCs generated by FARC-HD and FURIA and the decision trees computed by C4.5 and its cost-sensitive version, despite the highest complexity, result to be less accurate than the FRBCs generated by IT2-PAES-RCS. Finally, we will highlight how these FRBCs are easily interpretable by showing and discussing one of them

An overview of recent distributed algorithms for learning fuzzy models in Big Data classification

AbstractNowadays, a huge amount of data are generated, often in very short time intervals and in various formats, by a number of different heterogeneous sources such as social networks and media, mobile devices, internet transactions, networked devices and sensors. These data, identified as Big Data in the literature, are characterized by the popular Vs features, such as Value, Veracity, Variety, Velocity and Volume. In particular, Value focuses on the useful knowledge that may be mined from data. Thus, in the last years, a number of data mining and machine learning algorithms have been proposed to extract knowledge from Big Data. These algorithms have been generally implemented by using ad-hoc programming paradigms, such as MapReduce, on specific distributed computing frameworks, such as Apache Hadoop and Apache Spark. In the context of Big Data, fuzzy models are currently playing a significant role, thanks to their capability of handling vague and imprecise data and their innate characteristic to be interpretable. In this work, we give an overview of the most recent distributed learning algorithms for generating fuzzy classification models for Big Data. In particular, we first show some design and implementation details of these learning algorithms. Thereafter, we compare them in terms of accuracy and interpretability. Finally, we argue about their scalability

Perceptionization of FM/FD/1 queuing model under various fuzzy numbers

We present a FM/FD/1 queuing model with unbounded limit under different fuzzy numbers. The arrival (landing) rate and service (administration) rate are thought to be fuzzy numbers such as triangular, trapezoidal and pentagonal fuzzy numbers. Because random event can only be observed in an uncertain manner, the fuzzy result of an uncertainty mapping is a fuzzy random variable. Consequently, it is conceivable to characterize the specific connection between randomness and fuzziness. The execution proportions of this lining miniature are fuzzified after that examined by utilizing α-cut estimations and DSW algorithm (Dong, Shah and Wong). Relating to different fuzzy numbers, the numerical precedents are delineated to test the attainability of this model (miniature). A comparative illustration corresponding to each fuzzy number is accomplished for various estimations of α

Self learning neuro-fuzzy modeling using hybrid genetic probabilistic approach for engine air/fuel ratio prediction

Machine Learning is concerned in constructing models which can learn and make predictions based on data. Rule extraction from real world data that are usually tainted with noise, ambiguity, and uncertainty, automatically requires feature selection. Neuro-Fuzzy system (NFS) which is known with its prediction performance has the difficulty in determining the proper number of rules and the number of membership functions for each rule. An enhanced hybrid Genetic Algorithm based Fuzzy Bayesian classifier (GA-FBC) was proposed to help the NFS in the rule extraction. Feature selection was performed in the rule level overcoming the problems of the FBC which depends on the frequency of the features leading to ignore the patterns of small classes. As dealing with a real world problem such as the Air/Fuel Ratio (AFR) prediction, a multi-objective problem is adopted. The GA-FBC uses mutual information entropy, which considers the relevance between feature attributes and class attributes. A fitness function is proposed to deal with multi-objective problem without weight using a new composition method. The model was compared to other learning algorithms for NFS such as Fuzzy c-means (FCM) and grid partition algorithm. Predictive accuracy and the complexity of the Fuzzy Rule Base System (FRBS) including number of rules and number of terms in each rule were taken as terms of evaluation. It was also compared to the original GA-FBC depending on the frequency not on Mutual Information (MI). Experimental results using Air/Fuel Ratio (AFR) data sets show that the new model participates in decreasing the average number of attributes in the rule and sometimes in increasing the average performance compared to other models. This work facilitates in achieving a self-generating FRBS from real data. The GA-FBC can be used as a new direction in machine learning research. This research contributes in controlling automobile emissions in helping the reduction of one of the most causes of pollution to produce greener environment

Evolutionary Fuzzy Systems for Explainable Artificial Intelligence: Why, When, What for, and Where to?

Evolutionary fuzzy systems are one of the greatest advances within the area of computational intelligence. They consist of evolutionary algorithms applied to the design of fuzzy systems. Thanks to this hybridization, superb abilities are provided to fuzzy modeling in many different data science scenarios. This contribution is intended to comprise a position paper developing a comprehensive analysis of the evolutionary fuzzy systems research field. To this end, the "4 W" questions are posed and addressed with the aim of understanding the current context of this topic and its significance. Specifically, it will be pointed out why evolutionary fuzzy systems are important from an explainable point of view, when they began, what they are used for, and where the attention of researchers should be directed to in the near future in this area. They must play an important role for the emerging area of eXplainable Artificial Intelligence (XAI) learning from data

Automatic synthesis of fuzzy systems: An evolutionary overview with a genetic programming perspective

Studies in Evolutionary Fuzzy Systems (EFSs) began in the 90s and have experienced a fast development since then, with applications to areas such as pattern recognition, curve‐fitting and regression, forecasting and control. An EFS results from the combination of a Fuzzy Inference System (FIS) with an Evolutionary Algorithm (EA). This relationship can be established for multiple purposes: fine‐tuning of FIS's parameters, selection of fuzzy rules, learning a rule base or membership functions from scratch, and so forth. Each facet of this relationship creates a strand in the literature, as membership function fine‐tuning, fuzzy rule‐based learning, and so forth and the purpose here is to outline some of what has been done in each aspect. Special focus is given to Genetic Programming‐based EFSs by providing a taxonomy of the main architectures available, as well as by pointing out the gaps that still prevail in the literature. The concluding remarks address some further topics of current research and trends, such as interpretability analysis, multiobjective optimization, and synthesis of a FIS through Evolving methods

Controller tuning by means of evolutionary multiobjective optimization: current trends and applications

Control engineering problems are generally multi-objective problems; meaning that there are several specifications and requirements that must be fulfilled. A traditional approach for calculating a solution with the desired trade-off is to define an optimisation statement. Multi-objective optimisation techniques deal with this problem from a particular perspective and search for a set of potentially preferable solutions; the designer may then analyse the trade-offs among them, and select the best solution according to his/her preferences. In this paper, this design procedure based on evolutionary multiobjective optimisation (EMO) is presented and significant applications on controller tuning are discussed. Throughout this paper it is noticeable that EMO research has been developing towards different optimisation statements, but these statements are not commonly used in controller tuning. Gaps between EMO research and EMO applications on controller tuning are therefore detected and suggested as potential trends for research.The first author is grateful for the hospitality and availability of the UTC at the University of Sheffield during his academic research stay at 2011; especially to Dr. P.J. Fleming for his valuable comments and insights in the development of this paper. This work was partially supported by Grant FPI-2010/19 and project PAID-2011/2732 from the Universitat Politecnica de Valencia and projects TIN2011-28082 and ENE2011-25900 from the Spanish Ministry of Economy and Competitiveness.Reynoso Meza, G.; Blasco Ferragud, FX.; Sanchís Saez, J.; Martínez Iranzo, MA. (2014). Controller tuning by means of evolutionary multiobjective optimization: current trends and applications. Control Engineering Practice. 28:58-73. https://doi.org/10.1016/j.conengprac.2014.03.003S58732

Multi-faceted Assessment of Trademark Similarity

Trademarks are intellectual property assets with potentially high reputational value. Their infringement may lead to lost revenue, lower profits and damages to brand reputation. A test normally conducted to check whether a trademark is highly likely to infringe other existing, already registered, trademarks is called a likelihood of confusion test. One of the most influential factors in this test is establishing similarity in appearance, meaning or sound. However, even though the trademark registration process suggests a multi-faceted similarity assessment, relevant research in expert systems mainly focuses on computing individual aspects of similarity between trademarks. Therefore, this paper contributes to the knowledge in this field by proposing a method, which, similar to the way people perceive trademarks, blends together the three fundamental aspects of trademark similarity and produces an aggregated score based on the individual visual, semantic and phonetic assessments. In particular, semantic similarity is a new aspect, which has not been considered by other researchers in approaches aimed at providing decision support in trademark similarity assessment. Another specific scientific contribution of this paper is the innovative integration, using a fuzzy engine, of three independent assessments, which collectively provide a more balanced and human-centered view on potential infringement problems. In addition, the paper introduces the concept of degree of similarity since the line between similar and dissimilar trademarks is not always easy to define especially when dealing with blending three very different assessments. The work described in the paper is evaluated using a database comprising 1,400 trademarks compiled from a collection of real legal cases of trademark disputes. The evaluation involved two experiments. The first experiment employed information retrieval measures to test the classification accuracy of the proposed method while the second used human collective opinion to examine correlations between the trademark scoring/rating and the ranking of the proposed method, and human judgment. In the first experiment, the proposed method improved the F-score, precision and accuracy of classification by 12.5%, 35% and 8.3%, respectively, against the best score computed using individual similarity. In the second experiment, the proposed method produced a perfect positive Spearman rank correlation score of 1.00 in the ranking task and a pairwise Pearson correlation score of 0.92 in the rating task. The test of significance conducted on both scores rejected the null hypotheses of the experiment and showed that both scores correlated well with collective human judgment. The combined overall assessment could add value to existing support systems and be beneficial for both trademark examiners and trademark applicants. The method could be further used in addressing recent cyberspace phenomena related to trademark infringement such as customer hijacking and cybersquatting. Keywords—Trademark assessment, trademark infringement, trademark retrieval, degree of similarity, fuzzy aggregation, semantic similarity, phonetic similarity, visual similarity

Evolutionary prototype selection for multi-output regression

A novel approach to prototype selection for multi-output regression data sets is presented. A multi-objective evolutionary algorithm is used to evaluate the selections using two criteria: training data set compression and prediction quality expressed in terms of root mean squared error. A multi-target regressor based on k-NN was used for that purpose during the training to evaluate the error, while the tests were performed using four different multi-target predictive models. The distance matrices used by the multi-target regressor were cached to accelerate operational performance. Multiple Pareto fronts were also used to prevent overfitting and to obtain a broader range of solutions, by using different probabilities in the initialization of populations and different evolutionary parameters in each one. The results obtained with the benchmark data sets showed that the proposed method greatly reduced data set size and, at the same time, improved the predictive capabilities of the multi-output regressors trained on the reduced data set.NCN (Polish National Science Center) grant “Evolutionary Methods in Data Selection” No. 2017/01/X/ST6/00202, project TIN2015-67534-P (MINECO/FEDER, UE) of the Ministerio de Economía y Competitividad of the Spanish Government, and project BU085P17 (JCyL/FEDER, UE) of the Junta de Castilla y León cofinanced with European Union FEDER funds