aiqbench analysis
This paper introduces LineageEvo, a novel framework that enhances LLM-based evolutionary factor mining by incorporating lineage-level control to improve search directionality and diversity. By conditioning variation operators on historical evolutionary paths and stratifying search budgets, the method successfully discovers more predictive and structurally diverse financial factors compared to conventional approaches. The work represents a significant methodological advance in applying large language models to quantitative finance through improved evolutionary algorithms.
Lineage-Aware Search Control for LLM-Based Evolutionary Factor Mining
arXiv:2610.29663v1 Announce Type: cross Abstract: Formulaic alpha factor mining searches for symbolic expressions that transform market data into predictive signals. Recent LLM-based evolutionary factor mining methods use large language models as semantic variation operators. Under the conventional LLM-EA paradigm, stochastic variation and fitness-based selection can leave the search weakly directed and concentrated around a narrow set of structurally similar factors. We argue that these limitations arise because current methods mainly organize search at the individual and population levels, leaving lineage-level control underused. A lineage connects successive factor variants through evolutionary descent. We propose LineageEvo, which uses lineage in two coupled forms of search control: (1) lineage-conditioned LLM variation, which distills Lineage-Scoped Search Experience into operator-specific priors and fuses them with global operator priors, providing persistent, lineage-relevant guidance for LLM generation; and (2) lineage-stratified search allocation, which balances factor quality against lineage concentration by distributing the search budget across lineages during evolutionary search. Together, these mechanisms make semantic variation more direction aware and prevent branches from dominating the evolution, thereby promoting the discovery of predictive and diverse factors. We evaluate LineageEvo on CSI 500 and S&P 500 in terms of factor predictiveness, portfolio performance, search efficiency, and lineage- and expression-level diversity. LineageEvo achieves the strongest predictive performance on both markets, while LSPS produces a more balanced lineage distribution and a structurally broader factor pool. The results support lineage as a useful intermediate unit for controlling LLM-based evolutionary factor search.
Abstract:Formulaic alpha factor mining searches for symbolic expressions that transform market data into predictive signals. Recent LLM-based evolutionary factor mining methods use large language models as semantic variation operators. Under the conventional LLM-EA paradigm, stochastic variation and fitness-based selection can leave the search weakly directed and concentrated around a narrow set of structurally similar factors. We argue that these limitations arise because current methods mainly organize search at the individual and population levels, leaving lineage-level control underused. A lineage connects successive factor variants through evolutionary descent. We propose LineageEvo, which uses lineage in two coupled forms of search control: (1) lineage-conditioned LLM variation, which distills Lineage-Scoped Search Experience into operator-specific priors and fuses them with global operator priors, providing persistent, lineage-relevant guidance for LLM generation; and (2) lineage-stratified search allocation, which balances factor quality against lineage concentration by distributing the search budget across lineages during evolutionary search. Together, these mechanisms make semantic variation more direction aware and prevent branches from dominating the evolution, thereby promoting the discovery of predictive and diverse factors. We evaluate LineageEvo on CSI 500 and S&P 500 in terms of factor predictiveness, portfolio performance, search efficiency, and lineage- and expression-level diversity. LineageEvo achieves the strongest predictive performance on both markets, while LSPS produces a more balanced lineage distribution and a structurally broader factor pool. The results support lineage as a useful intermediate unit for controlling LLM-based evolutionary factor search.
Computational Finance (q-fin.CP); Artificial Intelligence (cs.AI); Machine Learning (cs.LG)
arXiv:2610.29663 [q-fin.CP]
(or arXiv:2610.29663v1 [q-fin.CP] for this version)
https://doi.org/10.48550/arXiv.2610.29663 Focus to learn more arXiv-issued DOI via DataCite (pending registration)
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