Modeling Financial Time Series with Artificial Neural Networks

Financial time series convey the decisions and actions of a population of human actors over time. Econometric and regressive models have been developed in the past decades for analyzing these time series. More recently, biologically inspired artificial neural network models have been shown to overcome some of the main challenges of traditional techniques by better exploiting the non-linear, non-stationary, and oscillatory nature of noisy, chaotic human interactions. This review paper explores the options, benefits, and weaknesses of the various forms of artificial neural networks as compared with regression techniques in the field of financial time series analysis.CELEST, a National Science Foundation Science of Learning Center (SBE-0354378); SyNAPSE program of the Defense Advanced Research Project Agency (HR001109-03-0001

Sentient Networks

In this paper we consider the question whether a distributed network of sensors and data processors can form "perceptions" based on the sensory data. Because sensory data can have exponentially many explanations, the use of a central data processor to analyze the outputs from a large ensemble of sensors will in general introduce unacceptable latencies for responding to dangerous situations. A better idea is to use a distributed "Helmholtz machine" architecture in which the collective state of the network as a whole provides an explanation for the sensory data.Comment: PostScript, 14 page

Symbol Emergence in Robotics: A Survey

Humans can learn the use of language through physical interaction with their environment and semiotic communication with other people. It is very important to obtain a computational understanding of how humans can form a symbol system and obtain semiotic skills through their autonomous mental development. Recently, many studies have been conducted on the construction of robotic systems and machine-learning methods that can learn the use of language through embodied multimodal interaction with their environment and other systems. Understanding human social interactions and developing a robot that can smoothly communicate with human users in the long term, requires an understanding of the dynamics of symbol systems and is crucially important. The embodied cognition and social interaction of participants gradually change a symbol system in a constructive manner. In this paper, we introduce a field of research called symbol emergence in robotics (SER). SER is a constructive approach towards an emergent symbol system. The emergent symbol system is socially self-organized through both semiotic communications and physical interactions with autonomous cognitive developmental agents, i.e., humans and developmental robots. Specifically, we describe some state-of-art research topics concerning SER, e.g., multimodal categorization, word discovery, and a double articulation analysis, that enable a robot to obtain words and their embodied meanings from raw sensory--motor information, including visual information, haptic information, auditory information, and acoustic speech signals, in a totally unsupervised manner. Finally, we suggest future directions of research in SER.Comment: submitted to Advanced Robotic

PREDICTION OF CRUDE OIL VISCOSITY USING FEED-FORWARD BACK-PROPAGATION NEURAL NETWORK (FFBPNN)

Crude oil viscosity is an important governing parameter of fluid flow both in the porous media and in pipelines. So, estimating the oil viscosity at various operating conditions with accuracy is of utmost importance to petroleum engineers. Usually, oil viscosity is determined by laboratory measurements at reservoir temperature. However, laboratory experiments are rather expensive and in most cases, the data from such experiments are not reliable. So, petroleum engineers prefer to use published correlations but these correlations are either too simple or too complex and so many of them are region-based not generic. To tackle the above enumerated drawbacks, in this paper, a Feed-Forward Back-Propagation Neural Network (FFBPNN) model has been developed to estimate the crude oil viscosity (μo) of Undersaturated reservoirs in the Niger Delta region of Nigeria. The newly developed FFBPNN model shows good results compared to the existing empirical correlations. The μo FFBPNN model achieved an average absolute relative error of 0.01998 and the correlation coefficient (R2) of 0.999 compared to the existing empirical correlations. From the performance plots for the FFBPNN model and empirical correlations against their experimental values, the FFBPNN model's performance was excellent

AI Solutions for MDS: Artificial Intelligence Techniques for Misuse Detection and Localisation in Telecommunication Environments

This report considers the application of Articial Intelligence (AI) techniques to the problem of misuse detection and misuse localisation within telecommunications environments. A broad survey of techniques is provided, that covers inter alia rule based systems, model-based systems, case based reasoning, pattern matching, clustering and feature extraction, articial neural networks, genetic algorithms, arti cial immune systems, agent based systems, data mining and a variety of hybrid approaches. The report then considers the central issue of event correlation, that is at the heart of many misuse detection and localisation systems. The notion of being able to infer misuse by the correlation of individual temporally distributed events within a multiple data stream environment is explored, and a range of techniques, covering model based approaches, `programmed' AI and machine learning paradigms. It is found that, in general, correlation is best achieved via rule based approaches, but that these suffer from a number of drawbacks, such as the difculty of developing and maintaining an appropriate knowledge base, and the lack of ability to generalise from known misuses to new unseen misuses. Two distinct approaches are evident. One attempts to encode knowledge of known misuses, typically within rules, and use this to screen events. This approach cannot generally detect misuses for which it has not been programmed, i.e. it is prone to issuing false negatives. The other attempts to `learn' the features of event patterns that constitute normal behaviour, and, by observing patterns that do not match expected behaviour, detect when a misuse has occurred. This approach is prone to issuing false positives, i.e. inferring misuse from innocent patterns of behaviour that the system was not trained to recognise. Contemporary approaches are seen to favour hybridisation, often combining detection or localisation mechanisms for both abnormal and normal behaviour, the former to capture known cases of misuse, the latter to capture unknown cases. In some systems, these mechanisms even work together to update each other to increase detection rates and lower false positive rates. It is concluded that hybridisation offers the most promising future direction, but that a rule or state based component is likely to remain, being the most natural approach to the correlation of complex events. The challenge, then, is to mitigate the weaknesses of canonical programmed systems such that learning, generalisation and adaptation are more readily facilitated