From Headlines to Holdings: Deep Learning for Smarter Portfolio Decisions
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arXiv
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| Hauptverfasser: | , , |
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| Format: | Preprint |
| Veröffentlicht: |
2025
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| _version_ | 1866910255915466752 |
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| author | Lin, Yun Lou, Jiawei Zhang, Jinghe |
| author_facet | Lin, Yun Lou, Jiawei Zhang, Jinghe |
| contents | Deep learning offers new tools for portfolio optimization. We present an end-to-end framework that directly learns portfolio weights by combining Long Short-Term Memory (LSTM) networks to model temporal patterns, Graph Attention Networks (GAT) to capture evolving inter-stock relationships, and sentiment analysis of financial news to reflect market psychology. Unlike prior approaches, our model unifies these elements in a single pipeline that produces daily allocations. It avoids the traditional two-step process of forecasting asset returns and then applying mean--variance optimization (MVO), a sequence that can introduce instability. We evaluate the framework on nine U.S. stocks spanning six sectors, chosen to balance sector diversity and news coverage. In this setting, the model delivers higher cumulative returns and Sharpe ratios than equal-weighted and CAPM-based MVO benchmarks. Although the stock universe is limited, the results underscore the value of integrating price, relational, and sentiment signals for portfolio management and suggest promising directions for scaling the approach to larger, more diverse asset sets. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2509_24144 |
| institution | arXiv |
| publishDate | 2025 |
| record_format | arxiv |
| spellingShingle | From Headlines to Holdings: Deep Learning for Smarter Portfolio Decisions Lin, Yun Lou, Jiawei Zhang, Jinghe Portfolio Management Computational Finance Statistical Finance Machine Learning Deep learning offers new tools for portfolio optimization. We present an end-to-end framework that directly learns portfolio weights by combining Long Short-Term Memory (LSTM) networks to model temporal patterns, Graph Attention Networks (GAT) to capture evolving inter-stock relationships, and sentiment analysis of financial news to reflect market psychology. Unlike prior approaches, our model unifies these elements in a single pipeline that produces daily allocations. It avoids the traditional two-step process of forecasting asset returns and then applying mean--variance optimization (MVO), a sequence that can introduce instability. We evaluate the framework on nine U.S. stocks spanning six sectors, chosen to balance sector diversity and news coverage. In this setting, the model delivers higher cumulative returns and Sharpe ratios than equal-weighted and CAPM-based MVO benchmarks. Although the stock universe is limited, the results underscore the value of integrating price, relational, and sentiment signals for portfolio management and suggest promising directions for scaling the approach to larger, more diverse asset sets. |
| title | From Headlines to Holdings: Deep Learning for Smarter Portfolio Decisions |
| topic | Portfolio Management Computational Finance Statistical Finance Machine Learning |
| url | https://arxiv.org/abs/2509.24144 |