Dhruv Desai

Guanchao Feng, Dhruv Desai, Stefano Pasquali et al.

In many real-world classification or recognition tasks, it is often difficult to collect training examples that exhaust all possible classes due to, for example, incomplete knowledge during training or ever changing regimes. Therefore, samples from unknown/novel classes may be encountered in testing/deployment. In such scenarios, the classifiers should be able to i) perform classification on known classes, and at the same time, ii) identify samples from unknown classes. This is known as open-set recognition. Although random forest has been an extremely successful framework as a general-purpose classification (and regression) method, in practice, it usually operates under the closed-set assumption and is not able to identify samples from new classes when run out of the box. In this work, we propose a novel approach to enabling open-set recognition capability for random forest classifiers by incorporating distance metric learning and distance-based open-set recognition. The proposed method is validated on both synthetic and real-world datasets. The experimental results indicate that the proposed approach outperforms state-of-the-art distance-based open-set recognition methods.

Mingshu Li, Bhaskarjit Sarmah, Dhruv Desai et al.

Due to the dynamic nature of financial markets, maintaining models that produce precise predictions over time is difficult. Often the goal isn't just point prediction but determining uncertainty. Quantifying uncertainty, especially the aleatoric uncertainty due to the unpredictable nature of market drivers, helps investors understand varying risk levels. Recently, quantile regression forests (QRF) have emerged as a promising solution: Unlike most basic quantile regression methods that need separate models for each quantile, quantile regression forests estimate the entire conditional distribution of the target variable with a single model, while retaining all the salient features of a typical random forest. We introduce a novel approach to compute quantile regressions from random forests that leverages the proximity (i.e., distance metric) learned by the model and infers the conditional distribution of the target variable. We evaluate the proposed methodology using publicly available datasets and then apply it towards the problem of forecasting the average daily volume of corporate bonds. We show that using quantile regression using Random Forest proximities demonstrates superior performance in approximating conditional target distributions and prediction intervals to the original version of QRF. We also demonstrate that the proposed framework is significantly more computationally efficient than traditional approaches to quantile regressions.

Gregory Yampolsky, Dhruv Desai, Mingshu Li et al.

The explainability of black-box machine learning algorithms, commonly known as Explainable Artificial Intelligence (XAI), has become crucial for financial and other regulated industrial applications due to regulatory requirements and the need for transparency in business practices. Among the various paradigms of XAI, Explainable Case-Based Reasoning (XCBR) stands out as a pragmatic approach that elucidates the output of a model by referencing actual examples from the data used to train or test the model. Despite its potential, XCBR has been relatively underexplored for many algorithms such as tree-based models until recently. We start by observing that most XCBR methods are defined based on the distance metric learned by the algorithm. By utilizing a recently proposed technique to extract the distance metric learned by Random Forests (RFs), which is both geometry- and accuracy-preserving, we investigate various XCBR methods. These methods amount to identify special points from the training datasets, such as prototypes, critics, counter-factuals, and semi-factuals, to explain the predictions for a given query of the RF. We evaluate these special points using various evaluation metrics to assess their explanatory power and effectiveness.

Lavinia Ghita, Dhruv Desai, Ioana Boier

Large Language Models (LLMs) achieve strong performance across a growing range of domains, yet their scale poses deployment challenges in applications where latency and cost constraints are critical. This paper derives empirical scaling laws for domain-specific LLM compression, quantifying how in-domain and general knowledge performance scale with dataset size, compression ratio, supervision format, and iterative pruning schedule. Using quantitative finance as our application domain, we compare logit-based and LoRA-based distillation under iterative structural pruning, introducing a blended chain-of-thought supervision loss that stabilizes KL-divergence distillation over reasoning traces. In-domain task quality degrades predictably under compression while general-knowledge benchmarks collapse well before the same point; supervision format is the key driver of this tradeoff, with chain-of-thought supervision actively recovering general knowledge that pruning erases. We release the headline dataset FinHeadlineMix, scaling law results, and practical recommendations to provide a reusable framework for domain-specific compression decisions.

Joshua S. Harvey, Joshua Rosaler, Mingshu Li et al.

We describe the use of an unsupervised Random Forest for similarity learning and improved unsupervised anomaly detection. By training a Random Forest to discriminate between real data and synthetic data sampled from a uniform distribution over the real data bounds, a distance measure is obtained that anisometrically transforms the data, expanding distances at the boundary of the data manifold. We show that using distances recovered from this transformation improves the accuracy of unsupervised anomaly detection, compared to other commonly used detectors, demonstrated over a large number of benchmark datasets. As well as improved performance, this method has advantages over other unsupervised anomaly detection methods, including minimal requirements for data preprocessing, native handling of missing data, and potential for visualizations. By relating outlier scores to partitions of the Random Forest, we develop a method for locally explainable anomaly predictions in terms of feature importance.