Financial decision support using neural networks and support vector machines

Bond rating is regarded as an important event for measuring financial risk of companies and for determining the investment returns of investors. As a result, it has been a popular research topic for researchers to predict companies' credit ratings by applying statistical and machine learning techniques. The statistical techniques, including multiple regression, multiple discriminant analysis (MDA), logistic models (LOGIT), and probit analysis, have been traditionally used in bond rating. However, one major drawback is that it should be based on strict assumptions. Such strict assumptions include linearity, normality, independence among predictor variables and pre-existing functional forms relating the criterion variablesand the predictor variables. Those strict assumptions of traditional statistics have limited their application to the real world. Machine learning techniques also used in bond rating prediction models include decision trees (DT), neural networks (NN), and Support Vector Machine (SVM). Especially, SVM is recognized as a new and promising classification and regression analysis method. SVM learns a separating hyperplane that can maximize the margin between two categories. SVM is simple enough to be analyzed mathematical, and leads to high performance in practical applications. SVM implements the structuralrisk minimization principle and searches to minimize an upper bound of the generalization error. In addition, the solution of SVM may be a global optimum and thus, overfitting is unlikely to occur with SVM. In addition, SVM does not require too many data sample for training since it builds prediction models by only using some representative sample near the boundaries called support vectors. A number of experimental researches have indicated that SVM has been successfully applied in a variety of pattern recognition fields. However, there are three major drawbacks that can be potential causes for degrading SVM's performance. First, SVM is originally proposed for solving binary-class classification problems. Methods for combining SVMs for multi-class classification such as One-Against-One, One-Against-All have been proposed, but they do not improve the performance in multi-class classification problem as much as SVM for binary-class classification. Second, approximation algorithms (e.g. decomposition methods, sequential minimal optimization algorithm) could be used for effective multi-class computation to reduce computation time, but it could deteriorate classification performance. Third, the difficulty in multi-class prediction problems is in data imbalance problem that can occur when the number of instances in one class greatly outnumbers the number of instances in the other class. Such data sets often cause a default classifier to be built due to skewed boundary and thus the reduction in the classification accuracy of such a classifier. SVM ensemble learning is one of machine learning methods to cope with the above drawbacks. Ensemble learning is a method for improving the performance of classification and prediction algorithms. AdaBoost is one of the widely used ensemble learning techniques. It constructs a composite classifier by sequentially training classifiers while increasing weight on the misclassified observations through iterations. The observations that are incorrectly predicted by previous classifiers are chosen more often than examples that are correctly predicted. Thus Boosting attempts to produce new classifiers that are better able to predict examples for which the current ensemble's performance is poor. In this way, it can reinforce the training of the misclassified observations of the minority class. This paper proposes a multiclass Geometric Mean-based Boosting (MGM-Boost) to resolve multiclass prediction problem. Since MGM-Boost introduces the notion of geometric mean into AdaBoost, it can perform learning process considering the geometric mean-based accuracy and errors of multiclass. This study applies MGM-Boost to the real-world bond rating case for Korean companies to examine the feasibility of MGM-Boost. 10-fold cross validations for threetimes with different random seeds are performed in order to ensure that the comparison among three different classifiers does not happen by chance. For each of 10-fold cross validation, the entire data set is first partitioned into tenequal-sized sets, and then each set is in turn used as the test set while the classifier trains on the other nine sets. That is, cross-validated folds have been tested independently of each algorithm. Through these steps, we have obtained the results for classifiers on each of the 30 experiments. In the comparison of arithmetic mean-based prediction accuracy between individual classifiers, MGM-Boost (52.95%) shows higher prediction accuracy than both AdaBoost (51.69%) and SVM (49.47%). MGM-Boost (28.12%) also shows the higher prediction accuracy than AdaBoost (24.65%) and SVM (15.42%)in terms of geometric mean-based prediction accuracy. T-test is used to examine whether the performance of each classifiers for 30 folds is significantly different. The results indicate that performance of MGM-Boost is significantly different from AdaBoost and SVM classifiers at 1% level. These results mean that MGM-Boost can provide robust and stable solutions to multi-classproblems such as bond rating.

Optical image provides a unique spectral and textural opportunity to acquire data free of charge in cloud-free weather conditions. However, textural information from recent Sentinel-2A data has not been sufficiently recognized. Several researches have shown that texture features are essential for extracting crop information. This study presents a new scheme that integrates spectral bands and textural features for mapping maize fields and other land cover types (i.e., build-up, trees, others, and water) and evaluates the effectiveness of random forest (RF) and support vector machine (SVM) classifiers with different kernel functions based on Sentinel 2A (S-2A) data. The textural features were derived from multiple bands of S-2A image using a grey-level co-occurrence matrix (GLCM) algorithm. To normalize the analysis of these features, Random Forest feature selection was employed. The outcomes show that S-2A images are appropriate for mapping maize fields and other land covers when the image is accessible during the growing season. The SVM classifier with a radial basis function (RBF) kernel is superior to a polynomial (P), linear (L), and sigmoid (S) kernel functions, and the RF classifiers. For the SVM_RBF, the highest overall accuracy was obtained from the integration of spectral bands and textural features at scenario 2 SVM_RBF (87.40%), followed by the combination of spectral and textural features at scenario 2 SVM_P kernel (86.56%). However, scenario 5 SVM_P kernel (85.54%), scenario 4 SVM_P kernel function (85.30%), the spectral features alone, and the SVM_P kernel function, have the highest O/A (83.90%) than that of the SVM_RBF (83.66%). The inclusion of textural features contributed significantly in mapping the smallholder’s maize field in the study area. This demonstrated the value of S-2A in agricultural research.

An improved SVM classifier based on double chains quantum genetic algorithm and its application in analogue circuit diagnosis

In this Letter, the authors present a unified framework for fall event detection and classification using the cumulants extracted from the acceleration (ACC) signals acquired using a single waist-mounted triaxial accelerometer. The main objective of this Letter is to find suitable representative cumulants and classifiers in effectively detecting and classifying different types of fall and non-fall events. It was discovered that the first level of the proposed hierarchical decision tree algorithm implements fall detection using fifth-order cumulants and support vector machine (SVM) classifier. In the second level, the fall event classification algorithm uses the fifth-order cumulants and SVM. Finally, human activity classification is performed using the second-order cumulants and SVM. The detection and classification results are compared with those of the decision tree, naive Bayes, multilayer perceptron and SVM classifiers with different types of time-domain features including the second-, third-, fourth- and fifth-order cumulants and the signal magnitude vector and signal magnitude area. The experimental results demonstrate that the second- and fifth-order cumulant features and SVM classifier can achieve optimal detection and classification rates of above 95%, as well as the lowest false alarm rate of 1.03%.

Performance analysis of SAR filtering techniques using SVM and Wishart Classifier

Lithology prediction by support vector classifiers using inverted seismic attributes data and petrophysical logs as a new approach and investigation of training data set size effect on its performance in a heterogeneous carbonate reservoir

This study investigated the effect of a new approach, the support vector machine, as a classifier tool to identify the weeds in corn fields at early growth stage. Image segmentation was done by transforming original color images to gray level images according to the statistical values of red, green, blue components. The Gray Level Co-occurrence Matrix (GLCM) and statistical properties of the histogram from the gray level images were further used to obtain the texture features of the weeds and corn seedlings. These texture features were used in the classification procedure. Principle component analysis was used to select the texture features according to their better contributions to reduce space dimensions. A Support Vector Machine (SVM) classifier was employed to recognize the weeds and the corn seedlings. The results indicated that the SVM classifiers with different feature selections could identify successfully weed-corn with a higher accuracy ranged from 92.31 to 100%. A comparison study of the recognition capabilities of SVM and back-propagation (BP) neural-network classifier using the same data set was conducted. It was found that the SVM classifier provided the best recognition performance with an accuracy of 100%, which exceeded the accuracy of 80% given by the BP classifier. Key words: Corn seedling, weeds, texture, support vector machine, recognize.

The problem with development of the support vector machine (SVM) classifiers using modified particle swarm optimization (PSO) algorithm and their ensembles has been considered. Solving this problem would allow fulfilling the high-precision data classification, especially Big Data classification, with the acceptable time expenditures. The modified PSO algorithm conducts a simultaneous search of the type of kernel functions, the parameters of the kernel function and the value of the regularization parameter for the SVM classifier. The idea of particles' «regeneration» served as the basis for the modified PSO algorithm. In the implementation of this algorithm, some particles change the type of their kernel function to the one which corresponds to the particle with the best value of the classification accuracy. The offered PSO algorithm allows reducing the time expenditures for the developed SVM classifiers, which is very important for Big Data classification problem. In most cases such SVM classifier provides the high quality of data classification. In exceptional cases the SVM ensembles based on the decorrelation maximization algorithm for the different strategies of the decision-making on the data classification and the majority vote rule can be used. Also, the two-level SVM classifier has been offered. This classifier works as the group of the SVM classifiers at the first level and as the SVM classifier on the base of the modified PSO algorithm at the second level. The results of experimental studies confirm the efficiency of the offered approaches for Big Data classification.

Using neural network ensembles for bankruptcy prediction and credit scoring

Cancer survival classification using integrated data sets and intermediate information.

Typically, data collected by a spacecraft is downlinked to Earth and preprocessed before any analysis is performed. We have developed classifiers that can be used onboard a spacecraft to identify high priority data for downlink to Earth, providing a method for maximizing the use of a potentially bandwidth limited downlink channel. Onboard analysis can also enable rapid reaction to dynamic events, such as flooding, volcanic eruptions or sea ice break-up.Four classifiers were developed to identify cryosphere events using hyperspectral images. These classifiers include a manually constructed classifier, a Support Vector Machine (SVM), a Decision Tree and a classifier derived by searching over combinations of thresholded band ratios. Each of the classifiers was designed to run in the computationally constrained operating environment of the spacecraft. A set of scenes was hand-labeled to provide training and testing data. Performance results on the test data indicate that the SVM and manual classifiers outperformed the Decision Tree and band-ratio classifiers with the SVM yielding slightly better classifications than the manual classifier.The manual and SVM classifiers have been uploaded to the EO-1 spacecraft and have been running onboard the spacecraft for over a year. Results of the onboard analysis are used by the Autonomous Sciencecraft Experiment (ASE) of NASA's New Millennium Program onboard EO-1 to automatically target the spacecraft to collect follow-on imagery. The software demonstrates the potential for future deep space missions to use onboard decision making to capture short-lived science events.

In order to improve the performance of Support Vector Machine (SVM) classifier for imbalanced data, this paper proposes dynamic cost-sensitive SVM classifier based on chaos particle swarm optimization (CPDC_SVM). Firstly, this paper introduces dynamic cost-sensitive thought to SVM classifier, and gives the method for structuring dynamic cost and cost-sensitive SVM model. Secondly, we propose the evaluation methodology performance for classifier, and adopts decimal base to code the particles. At last, chaos thought is introduced in particle swarm optimization algorithm, and the Algorithm of the dynamic cost-sensitive SVM classifier is given, which improves convergent speed and accuracy of particle swarm optimization, and can optimize dynamic cost-sensitive SVM well, so CPDC_SVM adds effectively the convergence speed and accuracy for the particle swarm optimization algorithm. Experimental results show CPDC_SVM has higher precision than traditional SVM classifier, and dynamic cost and chaos particle swarm optimization can improve the performance for classifier.

We perceive the digital watermark detection as classification problem in image processing. We classify watermarked images as positive class whilst unwatermarked images as negative class. Support Vector Machine (SVM) is used as classifier of the watermarked and unwatermarked digital images. Two watermarking schemes i.e. Cox's spread spectrum (SS) and Single Value Decomposition (SVD) are used to embed watermark into digital images. These algorithms are selected based on their different level of robustness to Stirmark attacks. The payload of the watermark used for both algorithms is consistent at certain number of bits. SVM is trained with both the watermarked and unwatermarked images. Receiver Operating Characteristics (ROC) graphs are plotted to assess the statistical detection behavior of both the correlation detector and SVM classifier. We found that straight forward application of SVM leads to generalization problem. We suggest remedies to preprocess the training data in order to achieve substantially better performance from SVM classifier than those resulting from the straightforward application of SVM. Both watermarked and unwatermarked images are attacked under Stirmark and are then tested with the correlation detectors and SVM classifier. A comparison of the ROC of the correlation detectors and SVM classifier is performed to assess the accuracy of SVM classifier relative to correlation detectors. We found that SVM classifier has higher robustness to Stirmark attacks.

An algorithm based on a support vector machine (SVM) is proposed for hydrometeor classification. The training phase is driven by the output of a fuzzy logic hydrometeor classification algorithm, i.e., the most popular approach for hydrometer classification algorithms used for ground-based weather radar. The performance of SVM is evaluated by resorting to a weather scenario, generated by a weather model; the corresponding radar measurements are obtained by simulation and by comparing results of SVM classification with those obtained by a fuzzy logic classifier. Results based on the weather model and simulations show a higher accuracy of the SVM classification. Objective comparison of the two classifiers applied to real radar data shows that SVM classification maps are spatially more homogenous (textural indices, energy, and homogeneity increases by 21% and 12% respectively) and do not present non-classified data. The improvements found by SVM classifier, even though it is applied pixel-by-pixel, can be attributed to its ability to learn from the entire hyperspace of radar measurements and to the accurate training. The reliability of results and higher computing performance make SVM attractive for some challenging tasks such as its implementation in Decision Support Systems for helping pilots to make optimal decisions about changes inthe flight route caused by unexpected adverse weather.

BackgroundThis study aimed to screen the feature modules and characteristic genes related to ulcerative colitis (UC) and construct a support vector machine (SVM) classifier to distinguish UC patients.MethodsFour datasets that contained UC and control samples were obtained from the Gene Expression Omnibus database. Differentially expressed genes (DEGs) with consistency were screened via the MetaDE method. The weighted gene coexpression network (WGCNA) was used to distinguish significant modules based on the four datasets. The protein–protein interaction network was established based on intersection genes. Enrichment analysis of Gene Ontology (GO) biological processes (BPs) and Kyoto Encyclopedia of Genes and Genomes (KEGG) pathway enrichment were established based on DAVID. An SVM combined with recursive feature elimination was also applied to construct a disease classifier for the disease diagnosis of UC patients. The efficacy of the SVM classifier was evaluated through receiver operating characteristic curves.ResultsTwelve highly preserved modules were obtained using the WGCNA, and 2009 DEGs with significant consistency were selected using the MetaDE method. Sixteen significantly related GO BPs and 12 KEGG pathways were obtained, such as cytokine-cytokine receptor interaction, cell adhesion molecules, and leukocyte transendothelial migration. Subsequently, 41 genes were used to construct an SVM classifier, such as CXCL1, CCR2, IL1B, and IL1A. The area under the curve (AUC) was 0.999 in the training dataset, whereas the AUC was 0.886, 0.790, and 0.819 in the validation set (GSE65114, GSE37283, and GSE36807, respectively).ConclusionsAn SVM classifier based on feature genes might correctly identify healthy people or UC patients.