The Competitive Analysis of Risk Taking with Application to Online Trading

Competitive analysis is concerned with minimizing a relative measure of performance. When applied to financial trading strategies, competitive analysis leads to the development of strategies with minimum relative performance risk. This approach is too inflexible. Many investors are interested in managing their risk:they may be willing to increase their risk for some form of reward. They may also have some forecast of the future. In this paper,we extend competitive analysis to provide a framework in which investors can develop optimal trading strategies based on their risk tolerance and forecast. We first define notions of risk and reward that are smooth extensions of classical competitive analysis. We then illustrate our ideas using the ski-rental problem, and analyze a financial game using the risk-reward framework

Can We Learn to Beat the Best Stock

A novel algorithm for actively trading stocks is presented. While traditional expert advice and "universal" algorithms (as well as standard technical trading heuristics) attempt to predict winners or trends, our approach relies on predictable statistical relations between all pairs of stocks in the market. Our empirical results on historical markets provide strong evidence that this type of technical trading can "beat the market" and moreover, can beat the best stock in the market. In doing so we utilize a new idea for smoothing critical parameters in the context of expert learning

Fast Deterministic Consensus in a Noisy Environment

It is well known that the consensus problem cannot be solved deterministically in an asynchronous environment, but that randomized solutions are possible. We propose a new model, called noisy scheduling, in which an adversarial schedule is perturbed randomly, and show that in this model randomness in the environment can substitute for randomness in the algorithm. In particular, we show that a simplified, deterministic version of Chandra's wait-free shared-memory consensus algorithm (PODC, 1996, pp. 166-175) solves consensus in time at most logarithmic in the number of active processes. The proof of termination is based on showing that a race between independent delayed renewal processes produces a winner quickly. In addition, we show that the protocol finishes in constant time using quantum and priority-based scheduling on a uniprocessor, suggesting that it is robust against the choice of model over a wide range.Comment: Typographical errors fixe

OnionBots: Subverting Privacy Infrastructure for Cyber Attacks

Over the last decade botnets survived by adopting a sequence of increasingly sophisticated strategies to evade detection and take overs, and to monetize their infrastructure. At the same time, the success of privacy infrastructures such as Tor opened the door to illegal activities, including botnets, ransomware, and a marketplace for drugs and contraband. We contend that the next waves of botnets will extensively subvert privacy infrastructure and cryptographic mechanisms. In this work we propose to preemptively investigate the design and mitigation of such botnets. We first, introduce OnionBots, what we believe will be the next generation of resilient, stealthy botnets. OnionBots use privacy infrastructures for cyber attacks by completely decoupling their operation from the infected host IP address and by carrying traffic that does not leak information about its source, destination, and nature. Such bots live symbiotically within the privacy infrastructures to evade detection, measurement, scale estimation, observation, and in general all IP-based current mitigation techniques. Furthermore, we show that with an adequate self-healing network maintenance scheme, that is simple to implement, OnionBots achieve a low diameter and a low degree and are robust to partitioning under node deletions. We developed a mitigation technique, called SOAP, that neutralizes the nodes of the basic OnionBots. We also outline and discuss a set of techniques that can enable subsequent waves of Super OnionBots. In light of the potential of such botnets, we believe that the research community should proactively develop detection and mitigation methods to thwart OnionBots, potentially making adjustments to privacy infrastructure.Comment: 12 pages, 8 figure