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Transforming Sentiment Analysis in the Financial Domain with ChatGPT (arxiv.org)
2 points by PaulHoule on Aug 19, 2023 | hide | past | pdf | discuss on HN

In plain words: ChatGPT was asked to judge the mood of forex news headlines from written instructions alone, with no training examples. It beat a standard financial sentiment model by about 35%, and its mood labels tracked market moves more closely.

Abstract

Financial sentiment analysis plays a crucial role in decoding market trends and guiding strategic trading decisions. Despite the deployment of advanced deep learning techniques and language models to refine sentiment analysis in finance, this study breaks new ground by investigating the potential of large language models, particularly ChatGPT 3.5, in financial sentiment analysis, with a strong emphasis on the foreign exchange market (forex). Employing a zero-shot prompting approach, we examine multiple ChatGPT prompts on a meticulously curated dataset of forex-related news headlines, measuring performance using metrics such as precision, recall, f1-score, and Mean Absolute Error (MAE) of the sentiment class. Additionally, we probe the correlation between predicted sentiment and market returns as an additional evaluation approach. ChatGPT, compared to FinBERT, a well-established sentiment analysis model for financial texts, exhibited approximately 35\% enhanced performance in sentiment classification and a 36\% higher correlation with market returns. By underlining the significance of prompt engineering, particularly in zero-shot contexts, this study spotlights ChatGPT's potential to substantially boost sentiment analysis in financial applications. By sharing the utilized dataset, our intention is to stimulate further research and advancements in the field of financial services.

Georgios Fatouros, John Soldatos, Kalliopi Kouroumali, Georgios Makridis, Dimosthenis Kyriazis
arXiv:2308.07935 · cs.CL, cs.AI, cs.CE, cs.IR · submitted Aug 13, 2023
abstract · pdf · html · 10 pages, 8 figures, Machine Learning with Applications (2023)

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