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| Format: | Preprint |
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2026
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| Online Access: | https://arxiv.org/abs/2605.31201 |
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| _version_ | 1866911732024213504 |
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| author | Zhao, Zijie Welsch, Roy E. |
| author_facet | Zhao, Zijie Welsch, Roy E. |
| contents | Financial retrieval-augmented generation (RAG) systems typically rank evidence by textual relevance, but in financial markets the useful evidence source depends on event type, forecast horizon, and market context. We study news-triggered event-impact prediction as a point-in-time financial RAG problem. For each company-news anchor, the system retrieves related financial news and SEC filing passages, appends a pre-decision market-context card, and predicts multi-horizon residual-return signals. Our method keeps the large language model (LLM) reader frozen and adapts the retrieval layer through an external Bayesian source memory updated from matured residual-return feedback. On a fixed 89-stock Nasdaq-oriented universe derived from the FinRL-DeepSeek/FNSPID task, using original FNSPID news and point-in-time EDGAR filing passages, Frozen Reader with Source Memory improves held-out macro-F1 from 0.438 to 0.471 and downstream portfolio Sharpe from 0.52 to 0.84 relative to Frozen Reader with No Memory. A supervised LoRA reader improves static RAG modestly, but does not improve over the frozen source-memory reader. These results suggest that, for financial RAG, learning where to retrieve from can be as important as learning how to read, offering a simple, modular route to market-feedback adaptation. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2605_31201 |
| institution | arXiv |
| publishDate | 2026 |
| record_format | arxiv |
| spellingShingle | Learning Whom to Trust: Market-Feedback Adaptive Retrieval for Frozen LLMs in Event-Driven Financial RAG Zhao, Zijie Welsch, Roy E. Computation and Language Financial retrieval-augmented generation (RAG) systems typically rank evidence by textual relevance, but in financial markets the useful evidence source depends on event type, forecast horizon, and market context. We study news-triggered event-impact prediction as a point-in-time financial RAG problem. For each company-news anchor, the system retrieves related financial news and SEC filing passages, appends a pre-decision market-context card, and predicts multi-horizon residual-return signals. Our method keeps the large language model (LLM) reader frozen and adapts the retrieval layer through an external Bayesian source memory updated from matured residual-return feedback. On a fixed 89-stock Nasdaq-oriented universe derived from the FinRL-DeepSeek/FNSPID task, using original FNSPID news and point-in-time EDGAR filing passages, Frozen Reader with Source Memory improves held-out macro-F1 from 0.438 to 0.471 and downstream portfolio Sharpe from 0.52 to 0.84 relative to Frozen Reader with No Memory. A supervised LoRA reader improves static RAG modestly, but does not improve over the frozen source-memory reader. These results suggest that, for financial RAG, learning where to retrieve from can be as important as learning how to read, offering a simple, modular route to market-feedback adaptation. |
| title | Learning Whom to Trust: Market-Feedback Adaptive Retrieval for Frozen LLMs in Event-Driven Financial RAG |
| topic | Computation and Language |
| url | https://arxiv.org/abs/2605.31201 |