Variable selection for financial distress classification using a genetic algorithm

This paper is concerned with the use of a genetic algorithm to select financial ratios for corporate distress classification models. For this purpose, the fitness value associated to a set of ratios is made to reflect the requirements of maximizing the amount of information available for the model and minimizing the collinearity between the model inputs. A case study involving 60 failed and continuing British firms in the period 1997-2000 is used for illustration. The classification model based on ratios selected by the genetic algorithm compares favorably with a model employing ratios usually found in the financial distress literature.

A practical approach for training dynamic recurrent neural networks: use of Apriori information

Presents a technique for incorporating a priori knowledge from a state space system into a neural network training algorithm. The training algorithm considered is that of chemotaxis and the networks being trained are recurrent neural networks. Incorporation of the a priori knowledge ensures that the resultant network has behaviour similar to the system which it is modelling.

Sensitivities of a cyclone detection and tracking algorithm: individual tracks and climatology

Northern Hemisphere cyclone activity is assessed by applying an algorithm for the detection and tracking of synoptic scale cyclones to mean sea level pressure data. The method, originally developed for the Southern Hemisphere, is adapted for application in the Northern Hemisphere winter season. NCEP-Reanalysis data from 1958/59 to 1997/98 are used as input. The sensitivities of the results to particular parameters of the algorithm are discussed for both case studies and from a climatological point of view. Results show that the choice of settings is of major relevance especially for the tracking of smaller scale and fast moving systems. With an appropriate setting the algorithm is capable of automatically tracking different types of cyclones at the same time: Both fast moving and developing systems over the large ocean basins and smaller scale cyclones over the Mediterranean basin can be assessed. The climatology of cyclone variables, e.g., cyclone track density, cyclone counts, intensification rates, propagation speeds and areas of cyclogenesis and -lysis gives detailed information on typical cyclone life cycles for different regions. The lowering of the spatial and temporal resolution of the input data from full resolution T62/06h to T42/12h decreases the cyclone track density and cyclone counts. Reducing the temporal resolution alone contributes to a decline in the number of fast moving systems, which is relevant for the cyclone track density. Lowering spatial resolution alone mainly reduces the number of weak cyclones.

A modified PNN algorithm with optimal PD modeling using the orthogonal least squares method

In this paper a modified algorithm is suggested for developing polynomial neural network (PNN) models. Optimal partial description (PD) modeling is introduced at each layer of the PNN expansion, a task accomplished using the orthogonal least squares (OLS) method. Based on the initial PD models determined by the polynomial order and the number of PD inputs, OLS selects the most significant regressor terms reducing the output error variance. The method produces PNN models exhibiting a high level of accuracy and superior generalization capabilities. Additionally, parsimonious models are obtained comprising a considerably smaller number of parameters compared to the ones generated by means of the conventional PNN algorithm. Three benchmark examples are elaborated, including modeling of the gas furnace process as well as the iris and wine classification problems. Extensive simulation results and comparison with other methods in the literature, demonstrate the effectiveness of the suggested modeling approach.

Search engine liability for autocomplete suggestions: personality, privacy and the power of the algorithm

This article is concerned with the liability of search engines for algorithmically produced search suggestions, such as through Google’s ‘autocomplete’ function. Liability in this context may arise when automatically generated associations have an offensive or defamatory meaning, or may even induce infringement of intellectual property rights. The increasing number of cases that have been brought before courts all over the world puts forward questions on the conflict of fundamental freedoms of speech and access to information on the one hand, and personality rights of individuals— under a broader right of informational self-determination—on the other. In the light of the recent judgment of the Court of Justice of the European Union (EU) in Google Spain v AEPD, this article concludes that many requests for removal of suggestions including private individuals’ information will be successful on the basis of EU data protection law, even absent prejudice to the person concerned.

Improvements on the Porter`s Stemming Algorithm for Portuguese

The amount of textual information digitally stored is growing every day. However, our capability of processing and analyzing that information is not growing at the same pace. To overcome this limitation, it is important to develop semiautomatic processes to extract relevant knowledge from textual information, such as the text mining process. One of the main and most expensive stages of the text mining process is the text pre-processing stage, where the unstructured text should be transformed to structured format such as an attribute-value table. The stemming process, i.e. linguistics normalization, is usually used to find the attributes of this table. However, the stemming process is strongly dependent on the language in which the original textual information is given. Furthermore, for most languages, the stemming algorithms proposed in the literature are computationally expensive. In this work, several improvements of the well know Porter stemming algorithm for the Portuguese language, which explore the characteristics of this language, are proposed. Experimental results show that the proposed algorithm executes in far less time without affecting the quality of the generated stems.

Grid job scheduling using Route with Genetic Algorithm support

In 2006 the Route load balancing algorithm was proposed and compared to other techniques aiming at optimizing the process allocation in grid environments. This algorithm schedules tasks of parallel applications considering computer neighborhoods (where the distance is defined by the network latency). Route presents good results for large environments, although there are cases where neighbors do not have an enough computational capacity nor communication system capable of serving the application. In those situations the Route migrates tasks until they stabilize in a grid area with enough resources. This migration may take long time what reduces the overall performance. In order to improve such stabilization time, this paper proposes RouteGA (Route with Genetic Algorithm support) which considers historical information on parallel application behavior and also the computer capacities and load to optimize the scheduling. This information is extracted by using monitors and summarized in a knowledge base used to quantify the occupation of tasks. Afterwards, such information is used to parameterize a genetic algorithm responsible for optimizing the task allocation. Results confirm that RouteGA outperforms the load balancing carried out by the original Route, which had previously outperformed others scheduling algorithms from literature.

Inference From Aging Information

For many learning tasks the duration of the data collection can be greater than the time scale for changes of the underlying data distribution. The question we ask is how to include the information that data are aging. Ad hoc methods to achieve this include the use of validity windows that prevent the learning machine from making inferences based on old data. This introduces the problem of how to define the size of validity windows. In this brief, a new adaptive Bayesian inspired algorithm is presented for learning drifting concepts. It uses the analogy of validity windows in an adaptive Bayesian way to incorporate changes in the data distribution over time. We apply a theoretical approach based on information geometry to the classification problem and measure its performance in simulations. The uncertainty about the appropriate size of the memory windows is dealt with in a Bayesian manner by integrating over the distribution of the adaptive window size. Thus, the posterior distribution of the weights may develop algebraic tails. The learning algorithm results from tracking the mean and variance of the posterior distribution of the weights. It was found that the algebraic tails of this posterior distribution give the learning algorithm the ability to cope with an evolving environment by permitting the escape from local traps.

A WAVELET-BASED SPEAKER VERIFICATION ALGORITHM

This paper presents a study on wavelets and their characteristics for the specific purpose of serving as a feature extraction tool for speaker verification (SV), considering a Radial Basis Function (RBF) classifier, which is a particular type of Artificial Neural Network (ANN). Examining characteristics such as support-size, frequency and phase responses, amongst others, we show how Discrete Wavelet Transforms (DWTs), particularly the ones which derive from Finite Impulse Response (FIR) filters, can be used to extract important features from a speech signal which are useful for SV. Lastly, an SV algorithm based on the concepts presented is described.

An Information Theory framework for two-stage binary image operator design

The design of translation invariant and locally defined binary image operators over large windows is made difficult by decreased statistical precision and increased training time. We present a complete framework for the application of stacked design, a recently proposed technique to create two-stage operators that circumvents that difficulty. We propose a novel algorithm, based on Information Theory, to find groups of pixels that should be used together to predict the Output Value. We employ this algorithm to automate the process of creating a set of first-level operators that are later combined in a global operator. We also propose a principled way to guide this combination, by using feature selection and model comparison. Experimental results Show that the proposed framework leads to better results than single stage design. (C) 2009 Elsevier B.V. All rights reserved.

Evidence Algorithm and Processing Formalized Mathematical Texts

The goal of a research programme Evidence Algorithm is a development of an open system of automated proving that is able to accumulate mathematical knowledge and to prove theorems in a context of a self-contained mathematical text. By now, the first version of such a system called a System for Automated Deduction, SAD, is implemented in software. The system SAD possesses the following main features: mathematical texts are formalized using a specific formal language that is close to a natural language of mathematical publications; a proof search is based on special sequent-type calculi formalizing natural reasoning style, such as application of definitions and auxiliary propositions. These calculi also admit a separation of equality handling from deduction that gives an opportunity to integrate logical reasoning with symbolic calculation.