Impact of Expert-Following Strategies in Financial Asset Recommendation
This paper proposes Expert-Following Strategies, a framework that identifies top-performing investors based on historical ROI and recommends assets they purchased, scoring by ROI-weighted purchase frequency, achieving statistically significant improvement in ROI and nDCG simultaneously.
Proposing a new framework that balances profitability and relevance in investment recommendations.
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Applications
- →Financial services
- →Investment management
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- Understanding of ROI and nDCGfind papers →
- Basic investment conceptsfind papers →
Abstract
More Like ThisFinancial institutions hold rich transaction histories, yet delivering recommendations that simultaneously maximize investment returns and ensure preference alignment remains a significant challenge. Existing approaches, namely return-based and preference-based strategies, each optimize a single objective, resulting in a fundamental trade-off between profitability (ROI) and relevance (nDCG). In this paper, we propose the Expert-Following Strategies: a framework that identifies top-performing investors based on their historical ROI and recommends the assets they purchased, scored by ROI-weighted purchase frequency. Our experiments using real-world transaction histories show that our strategy achieves statistically significant improvement over the market-average baseline in both ROI and nDCG simultaneously across all four thresholds.