Listed companies’ financial distress prediction based on weighted majority voting combination of multiple classifiers

How to effectively predict financial distress is an important problem in corporate financial management. Though much attention has been paid to financial distress prediction methods based on single classifier, its limitation of uncertainty and benefit of multiple classifier combination for financial distress prediction has also been neglected. This paper puts forward a financial distress prediction method based on weighted majority voting combination of multiple classifiers. The framework of multiple classifier combination system, model of weighted majority voting combination, basic classifiers’ voting weight model and basic classifiers’ selection principles are discussed in detail. Empirical experiment with Chinese listed companies’ real world data indicates that this method can greatly improve the average prediction accuracy and stability, and it is more suitable for financial distress prediction than single classifiers.     

MCELCCh-FDP: Financial distress prediction with classifier ensembles based on firm life cycle and Choquet integral

Financial distress prediction (FDP) has always been an important issue in the business and financial management. This research proposed a novel multiple classifier ensemble model based on firm life cycle and Choquet integral for FDP, named MCELCCh-FDP, as a new approach to tackle with financial distress. Empirical study based on Chinese listed companies’ real data is conducted, and the results show that the proposed MCELCCh-FDP model has higher prediction accuracy than single classifiers. In order to verify the prediction capability of firm life cycle and Choquet integral in FDP model, comparative analysis is conducted. The experiment results indicate that the introduction of firm life cycle and Choquet integral in FDP can greatly enhance prediction accuracy.     

Combining cluster analysis with classifier ensembles to predict financial distress

The ability to accurately predict business failure is a very important issue in financial decision-making. Incorrect decision-making in financial institutions is very likely to cause financial crises and distress. Bankruptcy prediction and credit scoring are two important problems facing financial decision support. As many related studies develop financial distress models by some machine learning techniques, more advanced machine learning techniques, such as classifier ensembles and hybrid classifiers, have not been fully assessed. The aim of this paper is to develop a novel hybrid financial distress model based on combining the clustering technique and classifier ensembles. In addition, single baseline classifiers, hybrid classifiers, and classifier ensembles are developed for comparisons. In particular, two clustering techniques, Self-Organizing Maps (SOMs) and k-means and three classification techniques, logistic regression, multilayer-perceptron (MLP) neural network, and decision trees, are used to develop these four different types of bankruptcy prediction models. As a result, 21 different models are compared in terms of average prediction accuracy and Type I & II errors. By using five related datasets, combining Self-Organizing Maps (SOMs) with MLP classifier ensembles performs the best, which provides higher predication accuracy and lower Type I & II errors.     

Efficiently processing deterministic approximate aggregation query on massive data

Financial distress prediction is very important to financial institutions who must be able to make critical decisions regarding customer loans. Bankruptcy prediction and credit scoring are the two main aspects considered in financial distress prediction. To assist in this determination, thereby lowering the risk borne by the financial institution, it is necessary to develop effective prediction models for prediction of the likelihood of bankruptcy and estimation of credit risk. A number of financial distress prediction models have been constructed, which utilize various machine learning techniques, such as single classifiers and classifier ensembles, but improving the prediction accuracy is the major research issue. In addition, aside from improving the prediction accuracy, there have been very few studies that specifically consider lowering the Type I error. In practice, Type I errors need to receive careful consideration during model construction because they can affect the cost to the financial institution. In this study, we introduce a classifier ensemble approach designed to reduce the misclassification cost. The outputs produced by multiple classifiers are combined by utilizing the unanimous voting (UV) method to find the final prediction result. Experimental results obtained based on four relevant datasets show that our UV ensemble approach outperforms the baseline single classifiers and classifier ensembles. Specifically, the UV ensemble not only provides relatively good prediction accuracy and minimizes Type I/II errors, but also produces the smallest misclassification cost.     

基于置信度的手写体数字识别多分类器动态组合

多分类器组合利用不同分类器、不同特征之间的互补性，提高了组合分类器的识别率。传统的组合方法里，各分类器在组合中所承担的角色是固定的，而实际应用中，对于不同的测试样本，每个分类器识别结果的可信度是不同的。该文根据分类器置信度理论，提出了各类别的置信度。用测试样本自身的置信度信息实现分类器的动态组合，并把这种动态组合方法具体应用到手写体数字的识别。这种方法还可以在不影响已有数据的情况下添加新的分类器进行组合。     

A novel fuzzy classifier with Choquet integral-based grey relational analysis for pattern classification problems

This paper aims to propose a fuzzy classifier, which is a one-class-in-one-network structure consisting of multiple novel single-layer perceptrons. Since the output value of each single-layer perceptron can be interpreted as the overall grade of the relationship between the input pattern and one class, the degree of relationship between an attribute of the input pattern and that of this class can be taken into account by establishing a representative pattern for each class. A feature of this paper is that it employs the grey relational analysis to compute the grades of relationship for individual attributes. In particular, instead of using the sigmoid function as the activation function, a non-additive technique, the Choquet integral, is used as an activation function to synthesize the performance values, since an assumption of noninteraction among attributes may not be reasonable. Thus, a single-layer perceptron in the proposed structure performs the synthetic evaluation of the Choquet integral-based grey relational analysis for a pattern. Each connection weight is interpreted as a degree of importance of an attribute and can be determined by a genetic algorithm-based method. The experimental results further demonstrate that the test results of the proposed fuzzy classifier are better than or comparable to those of other fuzzy or non-fuzzy classification methods.     

Using neural network ensembles for bankruptcy prediction and credit scoring

Bankruptcy prediction and credit scoring have long been regarded as critical topics and have been studied extensively in the accounting and finance literature. Artificial intelligence and machine learning techniques have been used to solve these financial decision-making problems. The multilayer perceptron (MLP) network trained by the back-propagation learning algorithm is the mostly used technique for financial decision-making problems. In addition, it is usually superior to other traditional statistical models. Recent studies suggest combining multiple classifiers (or classifier ensembles) should be better than single classifiers. However, the performance of multiple classifiers in bankruptcy prediction and credit scoring is not fully understood. In this paper, we investigate the performance of a single classifier as the baseline classifier to compare with multiple classifiers and diversified multiple classifiers by using neural networks based on three datasets. By comparing with the single classifier as the benchmark in terms of average prediction accuracy, the multiple classifiers only perform better in one of the three datasets. The diversified multiple classifiers trained by not only different classifier parameters but also different sets of training data perform worse in all datasets. However, for the Type I and Type II errors, there is no exact winner. We suggest that it is better to consider these three classifier architectures to make the optimal financial decision.     

基于模糊积分和遗传算法的分类器组合算法

将多个分类器进行组合能提高分类精度。基于模糊测度的Sugeno和Choquet积分具有理想的特性,因此该文利用其进行分类器组合。然而在实际中难以求得模糊测度。该文利用两种方法求取模糊测度,一是分类器对样本数据的分类能力,另一种是根据遗传算法。这两种方法均考虑了每个分类器对不同类的分类能力不同这一经验知识。实验中对UCI中的几个数据库进行了测试,同时将该组合方法应用于一多传感器融合工件识别系统。测试结果表明了该算法是一种计算简便、精度较高的分类器组合方法。     

Confidence factor weighted Gaussian function induced parallel fuzzy rank-level fusion for inference and its application to face recognition

This paper proposes a novel approach for inference using fuzzy rank-level fusion and explores it application to face recognition using multiple biometric representations. Multiple representations of single biometric (trait) aim to increase the reliability or acceptance of a biometric system, as it exploits the underlying essential characteristics provided by different sensors. In this paper, we propose a new scheme for generating fuzzy ranks induced by a Gaussian function based on the confidence of a classifier. In contrast to the conventional ranking, this fuzzy ranking reflects some associations among the outputs (confidence factors) of a classifier. These fuzzy ranks, yielded by multiple representations of a face image, are fused weighted by the corresponding confidence factors of the classifier to generate the final ranks while recognizing a face. In many real-world applications, where multiple traits of a person are unavailable, the proposed method is highly effective. However, it can easily be extended to multimodal biometric systems utilizing multiple classifiers. The experimental results using different feature vectors of a face image employing different classifiers show that the proposed method can significantly improve recognition accuracy as compared to those from individual feature vectors and as well as some commonly used rank-level fusion methods.     

基于多分类器集成的维吾尔文联机手写字母识别

多分类器组合能够在一定程度上弥补单个分类器的缺陷,因此它在模式识别中得到了广泛应用。深入调研国内外联机手写识别技术的研究动态,结合维吾尔文字母的独特书写风格,研究了基于多分类器集成的维吾尔语联机手写字母识别。利用5种不同的特征提取方法构造了5个独立的维吾尔语字母分类识别器,采用了等权投票和不等权投票等两种策略将5种维吾尔语字母分类识别器进行了有效组合。其中,单分类器采用了基于动态时间弯折（DTW）匹配距离的最近邻分类方法。实验结果表明,提出的集成策略的识别率明显高于单分类器的识别率,而且为特征的综合集成提供了多种有效途径。     

基于Sugeno模糊积分神经网络分类器融合方法在手写数字识别中的应用

神经网络是模式识别中一种常见的分类器.针对同一个分类问题,构建多个分类器并把多个分类器进行融合可以提高分类系统的分类正确率、改善系统的稳健性.首先介绍了Sugeno模糊积分及Sugeno模糊积分神经网络分类器融合方法的一般原理,而后将其应用于手写数字识别,通过实际的案例验证了该融合方法的有效性和可行性.     

New Applications of Ensembles of Classifiers

Combination (ensembles) of classifiers is now a well established research line. It has been observed that the predictive accuracy of a combination of independent classifiers excels that of the single best classifier. While ensembles of classifiers have been mostly employed to achieve higher recognition accuracy, this paper focuses on the use of combinations of individual classifiers for handling several problems from the practice in the machine learning, pattern recognition and data mining domains. In particular, the study presented concentrates on managing the imbalanced training sample problem, scaling up some preprocessing algorithms and filtering the training set. Here, all these situations are examined mainly in connection with the nearest neighbour classifier. Experimental results show the potential of multiple classifier systems when applied to those situations.     

A comparison of multiple classifier combinations using different voting-weights for remote sensing image classification

Remote sensing image classification is a common application of remote sensing images. In order to improve the performance of Remote sensing image classification, multiple classifier combinations are used to classify the Landsat-8 Operational Land Imager (Landsat-8 OLI) images. Some techniques and classifier combination algorithms are investigated. The classifier ensemble consisting of five member classifiers is constructed. The results of every member classifier are evaluated. The voting strategy is experimented to combine the classification results of the member classifier. The results show that all the classifiers have different performances and the multiple classifier combination provides better performance than a single classifier, and achieves higher overall accuracy of classification. The experiment shows that the multiple classifier combination using producer’s accuracy as voting-weight (MCC_mod2 and MCC_mod3) present higher classification accuracy than the algorithm using overall accuracy as voting-weight (MCC_mod1).And the multiple classifier combinations using different voting-weights affected the classification result in different land-cover types. The multiple classifier combination algorithm presented in this article using voting-weight based on the accuracy of multiple classifier may have stability problems, which need to be addressed in future studies.     

AdaBoost ensemble for financial distress prediction: An empirical comparison with data from Chinese listed companies

Due to the important role of financial distress prediction (FDP) for enterprises, it is crucial to improve the accuracy of FDP model. In recent years, classifier ensemble has shown promising advantage over single classifier, but the study on classifier ensemble methods for FDP is still not comprehensive enough and leaves to be further explored. This paper constructs AdaBoost ensemble respectively with single attribute test (SAT) and decision tree (DT) for FDP, and empirically compares them with single DT and support vector machine (SVM). After designing the framework of AdaBoost ensemble method for FDP, the article describes AdaBoost algorithm as well as SAT and DT algorithm in detail, which is followed by the combination mechanism of multiple classifiers. On the initial sample of 692 Chinese listed companies and 41 financial ratios, 30 times of holdout experiments are carried out for FDP respectively one year, two years, and three years in advance. In terms of experimental results, AdaBoost ensemble with SAT outperforms AdaBoost ensemble with DT, single DT classifier and single SVM classifier. As a conclusion, the choice of weak learner is crucial to the performance of AdaBoost ensemble, and AdaBoost ensemble with SAT is more suitable for FDP of Chinese listed companies.     

模式识别的统计模糊方法和模糊统计方法

本文在论述模式识别的统计方法和模糊方法的共同性、差异以及各自适用范围的基础上, 研究了模式识别的统计模糊方法和模糊统计方法.统计模糊方法是在模糊分类器中充分利用 模式分量统计信息的隶属函数,使分类性能优于普通的模糊分类器.模糊统计方法是在以统 计方法为基础的分类器中,用模式分量的模糊隶属函数代替模式分量作为分类器输入.从对 本文中几个数据集所作的分类试验结果看,这种方法只需要不大的训练样本集便可使分类性 能接近于Bayes分类器的最佳水平.     

Support vector learning for fuzzy rule-based classification systems

To design a fuzzy rule-based classification system (fuzzy classifier) with good generalization ability in a high dimensional feature space has been an active research topic for a long time. As a powerful machine learning approach for pattern recognition problems, the support vector machine (SVM) is known to have good generalization ability. More importantly, an SVM can work very well on a high- (or even infinite) dimensional feature space. This paper investigates the connection between fuzzy classifiers and kernel machines, establishes a link between fuzzy rules and kernels, and proposes a learning algorithm for fuzzy classifiers. We first show that a fuzzy classifier implicitly defines a translation invariant kernel under the assumption that all membership functions associated with the same input variable are generated from location transformation of a reference function. Fuzzy inference on the IF-part of a fuzzy rule can be viewed as evaluating the kernel function. The kernel function is then proven to be a Mercer kernel if the reference functions meet a certain spectral requirement. The corresponding fuzzy classifier is named positive definite fuzzy classifier (PDFC). A PDFC can be built from the given training samples based on a support vector learning approach with the IF-part fuzzy rules given by the support vectors. Since the learning process minimizes an upper bound on the expected risk (expected prediction error) instead of the empirical risk (training error), the resulting PDFC usually has good generalization. Moreover, because of the sparsity properties of the SVMs, the number of fuzzy rules is irrelevant to the dimension of input space. In this sense, we avoid the "curse of dimensionality." Finally, PDFCs with different reference functions are constructed using the support vector learning approach. The performance of the PDFCs is illustrated by extensive experimental results. Comparisons with other methods are also provided.     

Using the conflict in Dempster–Shafer evidence theory as a rejection criterion in classifier output combination for 3D human action recognition

In this paper, we propose a comprehensive solution to 3D human action recognition including feature extraction, classification, and multiple classifier combination. We effectively present two feature extraction methods, four different types of well-known classifiers, and four multiple classifier combination strategies including a specially designed belief based method. In order to enhance the recognition accuracy, we propose a new rejection criterion based on the conflict from the information sources: the classifier outputs. We test our method on the MSRAction 3D dataset. Discarding examples using the conflict based criterion shows superior results than other combination approaches. Moreover this criterion allows choosing a tradeoff between the performance and rejection rate.     

Choquet fuzzy integral-based hierarchical networks for decisionanalysis

A Choquet fuzzy integral-based approach to hierarchical network implementation is investigated. In this approach, we generalized the fuzzy integral as an excellent component for decision analysis. The generalization involves replacing the max (or min) operator in information aggregation with a fuzzy integral-based neuron, resulting in increased flexibility. The characteristics of the Choquet fuzzy integral are studied and a network-based decision-analysis framework is proposed. The trainable hierarchical network can be implemented utilizing the fuzzy integral-based neurons and connectives. The training algorithms are derived and several examples given to illustrate the behaviors of the networks. Also, we present a decision making experiment using the proposed network to learn appropriate functional relationships in the defective numeric fields detection domain     

二叉树型多分类器融合的轴承故障诊断方法

多分类器融合能有效集成多种分类算法的优势,实现优势互补,提高智能诊断模型的稳健性和诊断精度。但在利用多数投票法构建多分类器融合决策系统时,要求成员分类器数目多于要识别的设备状态数,否则会出现无法融合的情况。针对此问题,提出了一种基于二叉树的多分类器融合算法,利用二叉树将多类分类问题转化为多个二值分类问题,从而各个节点上的成员分类器个数只要大于2即可,有效避免了成员分类器数目不足的问题。实验结果表明,相比单一分类器的诊断方法,该方法能有效地实现滚动轴承故障智能诊断,并具有对各神经网络初始值不敏感、识别率高且稳定等优势。     

Financial distress prediction using support vector machines: Ensemble vs. individual

Financial distress prediction (FDP) is of great importance to both inner and outside parts of companies. Though lots of literatures have given comprehensive analysis on single classifier FDP method, ensemble method for FDP just emerged in recent years and needs to be further studied. Support vector machine (SVM) shows promising performance in FDP when compared with other single classifier methods. The contribution of this paper is to propose a new FDP method based on SVM ensemble, whose candidate single classifiers are trained by SVM algorithms with different kernel functions on different feature subsets of one initial dataset. SVM kernels such as linear, polynomial, RBF and sigmoid, and the filter feature selection/extraction methods of stepwise multi discriminant analysis (MDA), stepwise logistic regression (logit), and principal component analysis (PCA) are applied. The algorithm for selecting SVM ensemble's base classifiers from candidate ones is designed by considering both individual performance and diversity analysis. Weighted majority voting based on base classifiers’ cross validation accuracy on training dataset is used as the combination mechanism. Experimental results indicate that SVM ensemble is significantly superior to individual SVM classifier when the number of base classifiers in SVM ensemble is properly set. Besides, it also shows that RBF SVM based on features selected by stepwise MDA is a good choice for FDP when individual SVM classifier is applied.