Jihoon Kwon

Chanyeol Choi, Yoon Kim, Yu Yu et al.

Natural language processing (NLP) has been widely used in quantitative finance, but traditional methods often struggle to capture rich narratives in corporate disclosures, leaving potentially informative signals under-explored. Large language models (LLMs) offer a promising alternative due to their ability to extract nuanced semantics. In this paper, we ask whether semantic signals extracted by LLMs from corporate disclosures predict alpha, defined as abnormal returns beyond broad market movements and common risk factors. We introduce a simple framework, LLM as extractor, embedding as ruler, which extracts context-aware, metric-focused textual spans and quantifies semantic changes across consecutive disclosure periods using embedding-based similarity. This allows us to measure the degree of metric shifting -- how much firms move away from previously emphasized metrics, referred as moving targets. In experiments with portfolio and cross-sectional regression tests against a recent NER-based baseline, our method achieves more than twice the risk-adjusted alpha and shows significantly stronger predictive power. Qualitative analysis suggests that these gains stem from preserving contextual qualifiers and filtering out non-metric terms that keyword-based approaches often miss.

Jihoon Kwon, Jiwon Choi, Jy-yong Sohn

In-context learning (ICL) allows large language models (LLMs) to adapt to new tasks through demonstrations, yet it suffers from escalating inference costs as context length increases. While task vectors offer a promising alternative by compressing demonstrations into compact hidden-state representations, their quality has been evaluated only through downstream task accuracy. This indirect criterion provides limited insight into how to design more effective task vector extraction methods. In this paper, we posit that inference using task vectors should align their predictive distribution with that of ICL. To quantify this, we introduce $d_{\text{NTP}}$, a metric that measures the discrepancy in next-token probabilities between task vector-based and ICL-based inference. Our empirical analysis reveals that $d_{\text{NTP}}$ serves as a performance proxy, exhibiting a strong negative correlation with downstream accuracy. Motivated by this, we develop Linear Task Vector (LTV), a method designed to minimize $d_{\text{NTP}}$ via a closed-form linear mapping that estimates demonstration effects through regression. Across eight classification benchmarks and five LLMs, LTV consistently outperforms existing task vector baselines, improving average accuracy by 9.2\% while reducing inference latency. We further show that LTV outperforms the baselines on regression tasks. Moreover, we investigate the transferability of LTV across different model scales; an aspect that has remained nascent in task vector research. Specifically, we empirically show that task vectors from a larger model can enhance a smaller model's performance by 6.4\%, suggesting a new utility for extracted task representations.

Chanyeol Choi, Junseong Kim, Seolhwa Lee et al.

This report explores the enhancement of text retrieval performance using advanced data refinement techniques. We develop Linq-Embed-Mistral\footnote{\url{https://huggingface.co/Linq-AI-Research/Linq-Embed-Mistral}} by building on the E5-mistral and Mistral-7B-v0.1 models, focusing on sophisticated data crafting, data filtering, and negative mining methods, which are highly tailored to each task, applied to both existing benchmark dataset and highly tailored synthetic dataset generated via large language models (LLMs). Linq-Embed-Mistral excels in the MTEB benchmarks (as of May 29, 2024), achieving an average score of 68.2 across 56 datasets, and ranks 1st among all models for retrieval tasks on the MTEB leaderboard with a performance score of 60.2. This performance underscores its superior capability in enhancing search precision and reliability. Our contributions include advanced data refinement methods that significantly improve model performance on benchmark and synthetic datasets, techniques for homogeneous task ordering and mixed task fine-tuning to enhance model generalization and stability, and a streamlined evaluation process using 4-bit precision and a light retrieval evaluation set, which accelerates validation without sacrificing accuracy.

Hyeongmin Lee, Chanyeol Choi, Jihoon Kwon et al.

Asset retrieval--finding similar assets in a financial universe--is central to quantitative investment decision-making. Existing approaches define similarity through historical price patterns or sector classifications, but such backward-looking criteria provide no guarantee about future behavior. We argue that effective asset retrieval should be future-aligned: the retrieved assets should be those most likely to exhibit correlated future returns. To this end, we propose Future-Aligned Soft Contrastive Learning (FASCL), a representation learning framework whose soft contrastive loss uses pairwise future return correlations as continuous supervision targets. We further introduce an evaluation protocol designed to directly assess whether retrieved assets share similar future trajectories. Experiments on 4,229 US equities demonstrate that FASCL consistently outperforms 13 baselines across all future-behavior metrics. The source code will be available soon.

Alejandro Lopez-Lira, Jihoon Kwon, Sangwoon Yoon et al.

The rapid advancements in Large Language Models (LLMs) have unlocked transformative possibilities in natural language processing, particularly within the financial sector. Financial data is often embedded in intricate relationships across textual content, numerical tables, and visual charts, posing challenges that traditional methods struggle to address effectively. However, the emergence of LLMs offers new pathways for processing and analyzing this multifaceted data with increased efficiency and insight. Despite the fast pace of innovation in LLM research, there remains a significant gap in their practical adoption within the finance industry, where cautious integration and long-term validation are prioritized. This disparity has led to a slower implementation of emerging LLM techniques, despite their immense potential in financial applications. As a result, many of the latest advancements in LLM technology remain underexplored or not fully utilized in this domain. This survey seeks to bridge this gap by providing a comprehensive overview of recent developments in LLM research and examining their applicability to the financial sector. Building on previous survey literature, we highlight several novel LLM methodologies, exploring their distinctive capabilities and their potential relevance to financial data analysis. By synthesizing insights from a broad range of studies, this paper aims to serve as a valuable resource for researchers and practitioners, offering direction on promising research avenues and outlining future opportunities for advancing LLM applications in finance.

Chanyeol Choi, Alejandro Lopez-Lira, Yongjae Lee et al.

Extracting structured and quantitative insights from unstructured financial filings is essential in investment research, yet remains time-consuming and resource-intensive. Conventional approaches in practice rely heavily on labor-intensive manual processes, limiting scalability and delaying the research workflow. In this paper, we propose an efficient and scalable method for accurately extracting quantitative insights from unstructured financial documents, leveraging a multi-agent system composed of large language models. Our proposed multi-agent system consists of two specialized agents: the \emph{Extraction Agent} and the \emph{Text-to-SQL Agent}. The \textit{Extraction Agent} automatically identifies key performance indicators from unstructured financial text, standardizes their formats, and verifies their accuracy. On the other hand, the \textit{Text-to-SQL Agent} generates executable SQL statements from natural language queries, allowing users to access structured data accurately without requiring familiarity with the database schema. Through experiments, we demonstrate that our proposed system effectively transforms unstructured text into structured data accurately and enables precise retrieval of key information. First, we demonstrate that our system achieves approximately 95\% accuracy in transforming financial filings into structured data, matching the performance level typically attained by human annotators. Second, in a human evaluation of the retrieval task -- where natural language queries are used to search information from structured data -- 91\% of the responses were rated as correct by human evaluators. In both evaluations, our system generalizes well across financial document types, consistently delivering reliable performance.

Chanyeol Choi, Jihoon Kwon, Alejandro Lopez-Lira et al.

Accurate information retrieval (IR) is critical in the financial domain, where investors must identify relevant information from large collections of documents. Traditional IR methods -- whether sparse or dense -- often fall short in retrieval accuracy, as it requires not only capturing semantic similarity but also performing fine-grained reasoning over document structure and domain-specific knowledge. Recent advances in large language models (LLMs) have opened up new opportunities for retrieval with multi-step reasoning, where the model ranks passages through iterative reasoning about which information is most relevant to a given query. However, there exists no benchmark to evaluate such capabilities in the financial domain. To address this gap, we introduce FinAgentBench, the first large-scale benchmark for evaluating retrieval with multi-step reasoning in finance -- a setting we term agentic retrieval. The benchmark consists of 26K expert-annotated examples on S&P-500 listed firms and assesses whether LLM agents can (1) identify the most relevant document type among candidates, and (2) pinpoint the key passage within the selected document. Our evaluation framework explicitly separates these two reasoning steps to address context limitations. This design enables to provide a quantitative basis for understanding retrieval-centric LLM behavior in finance. We evaluate a suite of state-of-the-art models and further demonstrated how targeted fine-tuning can significantly improve agentic retrieval performance. Our benchmark provides a foundation for studying retrieval-centric LLM behavior in complex, domain-specific tasks for finance.

Jihoon Kwon, Kyle Min, Jy-yong Sohn

Despite recent advances, vision-language models trained with standard contrastive objectives still struggle with compositional reasoning -- the ability to understand structured relationships between visual and linguistic elements. This shortcoming is largely due to the tendency of the text encoder to focus on individual words rather than their relations, a limitation reinforced by contrastive training that primarily aligns words with visual objects. In this paper, we introduce REconstruction and Alignment of text Descriptions (READ), a fine-tuning method designed to enhance compositional reasoning by adding two auxiliary objectives to the contrastive learning: (1) a token-level reconstruction objective, where a frozen pre-trained decoder reconstructs alternative captions based on the embedding of the original caption; and (2) a sentence-level alignment objective, which explicitly aligns paraphrased sentences in the embedding space. We show that READ-CLIP, a model derived by applying the READ method to the pre-trained CLIP model, achieves the state-of-the-art performance across five major compositional reasoning benchmarks, outperforming the strongest conventional fine-tuning baseline by up to 4.1%. Furthermore, applying the READ to existing CLIP variants (including NegCLIP and FSC-CLIP) also improves performance on these benchmarks. Quantitative and qualitative analyses reveal that our proposed objectives -- reconstruction and alignment -- offer complementary benefits: the former encourages the encoder to capture relationships between words within a caption, while the latter ensures consistent representations for paraphrases expressed with different wording.