An intelligent system for risk classification of stock investment projects

The proposed paper demonstrates that a hybrid fuzzy neural network can serve as a risk classifier of stock investment projects. The training algorithm for the regular part of the network is based on bidirectional incremental evolution proving more efficient than direct evolution. The approach is compared with other crisp and soft investment appraisal and trading techniques, while building a multimodel domain representation for an intelligent decision support system. Thus the advantages of each model are utilised while looking at the investment problem from different perspectives. The empirical results are based on UK companies traded on the London Stock Exchange

Soft computing in investment appraisal

Standard financial techniques neglect extreme situations and regards large market shifts as too unlikely to matter. Such approach accounts for what occurs most of the time in the market, but does not reflect the reality, as major events happen in the rest of the time and investors are ‘surprised’ by ‘unexpected’ market movements. An alternative fuzzy approach permits fluctuations well beyond the probability type of uncertainty and allows one to make fewer assumptions about the data distribution and market behaviour. Fuzzifying the present value criteria, we suggest a measure of the risk associated with each investment opportunity and estimate the project’s robustness towards market uncertainty. The procedure is applied to thirty-five UK companies traded on the London Stock Exchange and a neural network solution to the fuzzy criterion is provided to facilitate the decision-making process. Finally, we suggest a specific evolutionary algorithm to train a fuzzy neural net - the bidirectional incremental evolution will automatically identify the complexity of the problem and correspondingly adapt the parameters of the fuzzy network

Measurements, Models, Systems and Design

531 s.

Computational intelligence techniques in engineering

This article shows how CI techniques overpass the strict limits of Artificial Intelligence (AI) field and can help solving real problems from distinct engineering areas: Mechanical, Computer Science and Electrical Engineering. An introduction to each of the CI main areas is made and three systems are briefly described. The results are, in each case, very promisingN/

Modeling and Control of Uncertain Nonlinear Systems

A survey of the methodologies associated with the modeling and control of uncertain nonlinear systems has been given due importance in this paper. The basic criteria that highlights the work is relied on the various patterns of techniques incorporated for the solutions of fuzzy equations that corresponds to fuzzy controllability subject. The solutions which are generated by these equations are considered to be the controllers. Currently, numerical techniques have come out as superior techniques in order to solve these types of problems. The implementation of neural networks technique is contributed in the complex way of dealing the appropriate coefficients and solutions of the fuzzy systems

Computational intelligence techniques in asset risk analysis

This thesis was submitted for the degree of Doctor of Philosophy and awarded by Brunel University.The problem of asset risk analysis is positioned within the computational intelligence paradigm. We suggest an algorithm for reformulating asset pricing, which involves incorporating imprecise information into the pricing factors through fuzzy variables as well as a calibration procedure for their possibility distributions. Then fuzzy mathematics is used to process the imprecise factors and obtain an asset evaluation. This evaluation is further automated using neural networks with sign restrictions on their weights. While such type of networks has been only used for up to two network inputs and hypothetical data, here we apply thirty-six inputs and empirical data. To achieve successful training, we modify the Levenberg-Marquart backpropagation algorithm. The intermediate result achieved is that the fuzzy asset evaluation inherits features of the factor imprecision and provides the basis for risk analysis. Next, we formulate a risk measure and a risk robustness measure based on the fuzzy asset evaluation under different characteristics of the pricing factors as well as different calibrations. Our database, extracted from DataStream, includes thirty-five companies traded on the London Stock Exchange. For each company, the risk and robustness measures are evaluated and an asset risk analysis is carried out through these values, indicating the implications they have on company performance. A comparative company risk analysis is also provided. Then, we employ both risk measures to formulate a two-step asset ranking method. The assets are initially rated according to the investors' risk preference. In addition, an algorithm is suggested to incorporate the asset robustness information and refine further the ranking benefiting market analysts. The rationale provided by the ranking technique serves as a point of departure in designing an asset risk classifier. We identify the fuzzy neural network structure of the classifier and develop an evolutionary training algorithm. The algorithm starts with suggesting preliminary heuristics in constructing a sufficient training set of assets with various characteristics revealed by the values of the pricing factors and the asset risk values. Then, the training algorithm works at two levels, the inner level targets weight optimization, while the outer level efficiently guides the exploration of the search space. The latter is achieved by automatically decomposing the training set into subsets of decreasing complexity and then incrementing backward the corresponding subpopulations of partially trained networks. The empirical results prove that the developed algorithm is capable of training the identified fuzzy network structure. This is a problem of such complexity that prevents single-level evolution from attaining meaningful results. The final outcome is an automatic asset classifier, based on the investors’ perceptions of acceptable risk. All the steps described above constitute our approach to reformulating asset risk analysis within the approximate reasoning framework through the fusion of various computational intelligence techniques

Intelligent systems in manufacturing: current developments and future prospects

Global competition and rapidly changing customer requirements are demanding increasing changes in manufacturing environments. Enterprises are required to constantly redesign their products and continuously reconfigure their manufacturing systems. Traditional approaches to manufacturing systems do not fully satisfy this new situation. Many authors have proposed that artificial intelligence will bring the flexibility and efficiency needed by manufacturing systems. This paper is a review of artificial intelligence techniques used in manufacturing systems. The paper first defines the components of a simplified intelligent manufacturing systems (IMS), the different Artificial Intelligence (AI) techniques to be considered and then shows how these AI techniques are used for the components of IMS

Genetic algorithms

Genetic algorithms are mathematical, highly parallel, adaptive search procedures (i.e., problem solving methods) based loosely on the processes of natural genetics and Darwinian survival of the fittest. Basic genetic algorithms concepts are introduced, genetic algorithm applications are introduced, and results are presented from a project to develop a software tool that will enable the widespread use of genetic algorithm technology