• Title/Summary/Keyword: Risk of Artificial Intelligence

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Performance Comparison of Reinforcement Learning Algorithms for Futures Scalping (해외선물 스캘핑을 위한 강화학습 알고리즘의 성능비교)

  • Jung, Deuk-Kyo;Lee, Se-Hun;Kang, Jae-Mo
    • The Journal of the Convergence on Culture Technology
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    • v.8 no.5
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    • pp.697-703
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    • 2022
  • Due to the recent economic downturn caused by Covid-19 and the unstable international situation, many investors are choosing the derivatives market as a means of investment. However, the derivatives market has a greater risk than the stock market, and research on the market of market participants is insufficient. Recently, with the development of artificial intelligence, machine learning has been widely used in the derivatives market. In this paper, reinforcement learning, one of the machine learning techniques, is applied to analyze the scalping technique that trades futures in minutes. The data set consists of 21 attributes using the closing price, moving average line, and Bollinger band indicators of 1 minute and 3 minute data for 6 months by selecting 4 products among futures products traded at trading firm. In the experiment, DNN artificial neural network model and three reinforcement learning algorithms, namely, DQN (Deep Q-Network), A2C (Advantage Actor Critic), and A3C (Asynchronous A2C) were used, and they were trained and verified through learning data set and test data set. For scalping, the agent chooses one of the actions of buying and selling, and the ratio of the portfolio value according to the action result is rewarded. Experiment results show that the energy sector products such as Heating Oil and Crude Oil yield relatively high cumulative returns compared to the index sector products such as Mini Russell 2000 and Hang Seng Index.

The Factors Influencing Value Awareness of Personalized Service and Intention to Use Smart Home: An Analysis of Differences between "Generation MZ" and "Generation X and Baby Boomers" (스마트홈 개인화 서비스에 대한 가치 인식 및 사용의도에의 영향 요인: "MZ세대"와 "X세대 및 베이비붐 세대" 간 차이 분석)

  • Sang-Keul Lee;Ae Ri Lee
    • Information Systems Review
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    • v.23 no.3
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    • pp.201-223
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    • 2021
  • Smart home is an advanced Internet of Things (IoT) service that enhances the convenience of human daily life and improves the quality of life at home. Recently, with the emergence of smart home products and services to which artificial intelligence (AI) technology is applied, interest in smart home is increasing. To gain a competitive edge in the smart home market, companies are providing "personalized service" to users, which is a key service that can promote smart home use. This study investigates the factors affecting the value awareness of personalized service and intention to use smart home. This research focuses on four-dimensional motivated innovativeness (cognitive, functional, hedonic, and social innovativeness) and privacy risk awareness as key factors that influence the value awareness of personalized service of smart home. In particular, this study conducts a comparative analysis between the generation MZ (young people in late teens to 30s), who are showing socially differentiated characteristics, and the generation X and baby boomers in 40s to 50s or older. Based on the analysis results, this study derives the distinctive characteristics of generation MZ that are different from the older generation, and provides academic and practical implications for expanding the use of smart home services.

A Study on Establishment of AI Development Strategy for Ground Operations innovation Applying PEST - 7S - SWOT (PEST-7S-SWOT 방법론을 적용한 지상작전 혁신을 위한 인공지능(AI) 발전전략에 관한 연구)

  • Bae, Kyungyeol;Cho, Jungkeun;Yoo, Byung Joo
    • Journal of the Korea Academia-Industrial cooperation Society
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    • v.22 no.6
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    • pp.67-74
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    • 2021
  • Ground Operations Command (GOC) has studied various methods using artificial intelligence (AI) in order to accomplish ground missions more effectively and to strongly respond to variable strategic situations with advancements in fourth industrial revolution technology. As the result of various literature reviews, PEST-7S-SWOT is considered the most appropriate methodology for promoting strategies and for task development. These procedures consist of three stages. Phase 1 is analysis of external environmental factors from applying PEST procedures. We analyzed external environmental factors to determine opportunities and risk factors. Phase 2 is the analysis of internal environmental factors from applying 7S strategies. We analyzed the current state of an organization to find strengths and weaknesses. Phase 3 is SWOT analysis. It is based on the opportunities and risk factors from Phase 1 and the strength and weakness factors from Phase 2. We derive promotional strategies and tasks through SWOT analysis. In this study, four strategies and 11 tasks were derived for GOC AI systems. Those are promotion of policies and systems, reinforcing organizations, building an AI base, increasing expertise and capabilities, and validating PEST-7S-SWOT methodologies.

A Study on the Application of the Cyber Threat Management System to the Future C4I System Based on Big Data/Cloud (빅데이터/클라우드 기반 미래 C4I체계 사이버위협 관리체계 적용 방안 연구)

  • Park, Sangjun;Kang, Jungho
    • Convergence Security Journal
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    • v.20 no.4
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    • pp.27-34
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    • 2020
  • Recently, the fourth industrial revolution technology has not only changed everyday life greatly through technological development, but has also become a major keyword in the establishment of defense policy. In particular, Internet of Things, cloud, big data, mobile and cybersecurity technologies, called ICBMS, were selected as core leading technologies in defense information policy along with artificial intelligence. Amid the growing importance of the fourth industrial revolution technology, research is being carried out to develop the C4I system, which is currently operated separately by the Joint Chiefs of Staff and each military, including the KJCCS, ATCIS, KNCCS and AFCCS, into an integrated system in preparation for future warfare. This is to solve the problem of reduced interoperability for joint operations, such as information exchange, by operating the C4I system for each domain. In addition, systems such as the establishment of an integrated C4I system and the U.S. military's Risk Management Framework (RMF) are essential for efficient control and safe operation of weapons systems as they are being developed into super-connected and super-intelligent systems. Therefore, in this paper, the intelligent cyber threat detection, management of users' access to information, and intelligent management and visualization of cyber threat are presented in the future C4I system based on big data/cloud.

Development on Identification Algorithm of Risk Situation around Construction Vehicle using YOLO-v3 (YOLO-v3을 활용한 건설 장비 주변 위험 상황 인지 알고리즘 개발)

  • Shim, Seungbo;Choi, Sang-Il
    • Journal of the Korea Academia-Industrial cooperation Society
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    • v.20 no.7
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    • pp.622-629
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    • 2019
  • Recently, the government is taking new approaches to change the fact that the accident rate and accident death rate of the construction industry account for a high percentage of the whole industry. Especially, it is investing heavily in the development of construction technology that is fused with ICT technology in line with the current trend of the 4th Industrial Revolution. In order to cope with this situation, this paper proposed a concept to recognize and share the work situation information between the construction machine driver and the surrounding worker to enhance the safety in the place where construction machines are operated. In order to realize the part of the concept, we applied image processing technology using camera based on artificial intelligence to earth-moving work. Especially, we implemented an algorithm that can recognize the surrounding worker's circumstance and identify the risk situation through the experiment using the compaction equipment. and image processing algorithm based on YOLO-v3. This algorithm processes 15.06 frames per second in video and can recognize danger situation around construction machine with accuracy of 90.48%. We will contribute to the prevention of safety accidents at the construction site by utilizing this technology in the future.

Financial Products Recommendation System Using Customer Behavior Information (고객의 투자상품 선호도를 활용한 금융상품 추천시스템 개발)

  • Hyojoong Kim;SeongBeom Kim;Hee-Woong Kim
    • Information Systems Review
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    • v.25 no.1
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    • pp.111-128
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    • 2023
  • With the development of artificial intelligence technology, interest in data-based product preference estimation and personalized recommender systems is increasing. However, if the recommendation is not suitable, there is a risk that it may reduce the purchase intention of the customer and even extend to a huge financial loss due to the characteristics of the financial product. Therefore, developing a recommender system that comprehensively reflects customer characteristics and product preferences is very important for business performance creation and response to compliance issues. In the case of financial products, product preference is clearly divided according to individual investment propensity and risk aversion, so it is necessary to provide customized recommendation service by utilizing accumulated customer data. In addition to using these customer behavioral characteristics and transaction history data, we intend to solve the cold-start problem of the recommender system, including customer demographic information, asset information, and stock holding information. Therefore, this study found that the model proposed deep learning-based collaborative filtering by deriving customer latent preferences through characteristic information such as customer investment propensity, transaction history, and financial product information based on customer transaction log records was the best. Based on the customer's financial investment mechanism, this study is meaningful in developing a service that recommends a high-priority group by establishing a recommendation model that derives expected preferences for untraded financial products through financial product transaction data.

An Intelligent Intrusion Detection Model Based on Support Vector Machines and the Classification Threshold Optimization for Considering the Asymmetric Error Cost (비대칭 오류비용을 고려한 분류기준값 최적화와 SVM에 기반한 지능형 침입탐지모형)

  • Lee, Hyeon-Uk;Ahn, Hyun-Chul
    • Journal of Intelligence and Information Systems
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    • v.17 no.4
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    • pp.157-173
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    • 2011
  • As the Internet use explodes recently, the malicious attacks and hacking for a system connected to network occur frequently. This means the fatal damage can be caused by these intrusions in the government agency, public office, and company operating various systems. For such reasons, there are growing interests and demand about the intrusion detection systems (IDS)-the security systems for detecting, identifying and responding to unauthorized or abnormal activities appropriately. The intrusion detection models that have been applied in conventional IDS are generally designed by modeling the experts' implicit knowledge on the network intrusions or the hackers' abnormal behaviors. These kinds of intrusion detection models perform well under the normal situations. However, they show poor performance when they meet a new or unknown pattern of the network attacks. For this reason, several recent studies try to adopt various artificial intelligence techniques, which can proactively respond to the unknown threats. Especially, artificial neural networks (ANNs) have popularly been applied in the prior studies because of its superior prediction accuracy. However, ANNs have some intrinsic limitations such as the risk of overfitting, the requirement of the large sample size, and the lack of understanding the prediction process (i.e. black box theory). As a result, the most recent studies on IDS have started to adopt support vector machine (SVM), the classification technique that is more stable and powerful compared to ANNs. SVM is known as a relatively high predictive power and generalization capability. Under this background, this study proposes a novel intelligent intrusion detection model that uses SVM as the classification model in order to improve the predictive ability of IDS. Also, our model is designed to consider the asymmetric error cost by optimizing the classification threshold. Generally, there are two common forms of errors in intrusion detection. The first error type is the False-Positive Error (FPE). In the case of FPE, the wrong judgment on it may result in the unnecessary fixation. The second error type is the False-Negative Error (FNE) that mainly misjudges the malware of the program as normal. Compared to FPE, FNE is more fatal. Thus, when considering total cost of misclassification in IDS, it is more reasonable to assign heavier weights on FNE rather than FPE. Therefore, we designed our proposed intrusion detection model to optimize the classification threshold in order to minimize the total misclassification cost. In this case, conventional SVM cannot be applied because it is designed to generate discrete output (i.e. a class). To resolve this problem, we used the revised SVM technique proposed by Platt(2000), which is able to generate the probability estimate. To validate the practical applicability of our model, we applied it to the real-world dataset for network intrusion detection. The experimental dataset was collected from the IDS sensor of an official institution in Korea from January to June 2010. We collected 15,000 log data in total, and selected 1,000 samples from them by using random sampling method. In addition, the SVM model was compared with the logistic regression (LOGIT), decision trees (DT), and ANN to confirm the superiority of the proposed model. LOGIT and DT was experimented using PASW Statistics v18.0, and ANN was experimented using Neuroshell 4.0. For SVM, LIBSVM v2.90-a freeware for training SVM classifier-was used. Empirical results showed that our proposed model based on SVM outperformed all the other comparative models in detecting network intrusions from the accuracy perspective. They also showed that our model reduced the total misclassification cost compared to the ANN-based intrusion detection model. As a result, it is expected that the intrusion detection model proposed in this paper would not only enhance the performance of IDS, but also lead to better management of FNE.

Development of a Stock Trading System Using M & W Wave Patterns and Genetic Algorithms (M&W 파동 패턴과 유전자 알고리즘을 이용한 주식 매매 시스템 개발)

  • Yang, Hoonseok;Kim, Sunwoong;Choi, Heung Sik
    • Journal of Intelligence and Information Systems
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    • v.25 no.1
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    • pp.63-83
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    • 2019
  • Investors prefer to look for trading points based on the graph shown in the chart rather than complex analysis, such as corporate intrinsic value analysis and technical auxiliary index analysis. However, the pattern analysis technique is difficult and computerized less than the needs of users. In recent years, there have been many cases of studying stock price patterns using various machine learning techniques including neural networks in the field of artificial intelligence(AI). In particular, the development of IT technology has made it easier to analyze a huge number of chart data to find patterns that can predict stock prices. Although short-term forecasting power of prices has increased in terms of performance so far, long-term forecasting power is limited and is used in short-term trading rather than long-term investment. Other studies have focused on mechanically and accurately identifying patterns that were not recognized by past technology, but it can be vulnerable in practical areas because it is a separate matter whether the patterns found are suitable for trading. When they find a meaningful pattern, they find a point that matches the pattern. They then measure their performance after n days, assuming that they have bought at that point in time. Since this approach is to calculate virtual revenues, there can be many disparities with reality. The existing research method tries to find a pattern with stock price prediction power, but this study proposes to define the patterns first and to trade when the pattern with high success probability appears. The M & W wave pattern published by Merrill(1980) is simple because we can distinguish it by five turning points. Despite the report that some patterns have price predictability, there were no performance reports used in the actual market. The simplicity of a pattern consisting of five turning points has the advantage of reducing the cost of increasing pattern recognition accuracy. In this study, 16 patterns of up conversion and 16 patterns of down conversion are reclassified into ten groups so that they can be easily implemented by the system. Only one pattern with high success rate per group is selected for trading. Patterns that had a high probability of success in the past are likely to succeed in the future. So we trade when such a pattern occurs. It is a real situation because it is measured assuming that both the buy and sell have been executed. We tested three ways to calculate the turning point. The first method, the minimum change rate zig-zag method, removes price movements below a certain percentage and calculates the vertex. In the second method, high-low line zig-zag, the high price that meets the n-day high price line is calculated at the peak price, and the low price that meets the n-day low price line is calculated at the valley price. In the third method, the swing wave method, the high price in the center higher than n high prices on the left and right is calculated as the peak price. If the central low price is lower than the n low price on the left and right, it is calculated as valley price. The swing wave method was superior to the other methods in the test results. It is interpreted that the transaction after checking the completion of the pattern is more effective than the transaction in the unfinished state of the pattern. Genetic algorithms(GA) were the most suitable solution, although it was virtually impossible to find patterns with high success rates because the number of cases was too large in this simulation. We also performed the simulation using the Walk-forward Analysis(WFA) method, which tests the test section and the application section separately. So we were able to respond appropriately to market changes. In this study, we optimize the stock portfolio because there is a risk of over-optimized if we implement the variable optimality for each individual stock. Therefore, we selected the number of constituent stocks as 20 to increase the effect of diversified investment while avoiding optimization. We tested the KOSPI market by dividing it into six categories. In the results, the portfolio of small cap stock was the most successful and the high vol stock portfolio was the second best. This shows that patterns need to have some price volatility in order for patterns to be shaped, but volatility is not the best.

Analysis of Trading Performance on Intelligent Trading System for Directional Trading (방향성매매를 위한 지능형 매매시스템의 투자성과분석)

  • Choi, Heung-Sik;Kim, Sun-Woong;Park, Sung-Cheol
    • Journal of Intelligence and Information Systems
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    • v.17 no.3
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    • pp.187-201
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    • 2011
  • KOSPI200 index is the Korean stock price index consisting of actively traded 200 stocks in the Korean stock market. Its base value of 100 was set on January 3, 1990. The Korea Exchange (KRX) developed derivatives markets on the KOSPI200 index. KOSPI200 index futures market, introduced in 1996, has become one of the most actively traded indexes markets in the world. Traders can make profit by entering a long position on the KOSPI200 index futures contract if the KOSPI200 index will rise in the future. Likewise, they can make profit by entering a short position if the KOSPI200 index will decline in the future. Basically, KOSPI200 index futures trading is a short-term zero-sum game and therefore most futures traders are using technical indicators. Advanced traders make stable profits by using system trading technique, also known as algorithm trading. Algorithm trading uses computer programs for receiving real-time stock market data, analyzing stock price movements with various technical indicators and automatically entering trading orders such as timing, price or quantity of the order without any human intervention. Recent studies have shown the usefulness of artificial intelligent systems in forecasting stock prices or investment risk. KOSPI200 index data is numerical time-series data which is a sequence of data points measured at successive uniform time intervals such as minute, day, week or month. KOSPI200 index futures traders use technical analysis to find out some patterns on the time-series chart. Although there are many technical indicators, their results indicate the market states among bull, bear and flat. Most strategies based on technical analysis are divided into trend following strategy and non-trend following strategy. Both strategies decide the market states based on the patterns of the KOSPI200 index time-series data. This goes well with Markov model (MM). Everybody knows that the next price is upper or lower than the last price or similar to the last price, and knows that the next price is influenced by the last price. However, nobody knows the exact status of the next price whether it goes up or down or flat. So, hidden Markov model (HMM) is better fitted than MM. HMM is divided into discrete HMM (DHMM) and continuous HMM (CHMM). The only difference between DHMM and CHMM is in their representation of state probabilities. DHMM uses discrete probability density function and CHMM uses continuous probability density function such as Gaussian Mixture Model. KOSPI200 index values are real number and these follow a continuous probability density function, so CHMM is proper than DHMM for the KOSPI200 index. In this paper, we present an artificial intelligent trading system based on CHMM for the KOSPI200 index futures system traders. Traders have experienced on technical trading for the KOSPI200 index futures market ever since the introduction of the KOSPI200 index futures market. They have applied many strategies to make profit in trading the KOSPI200 index futures. Some strategies are based on technical indicators such as moving averages or stochastics, and others are based on candlestick patterns such as three outside up, three outside down, harami or doji star. We show a trading system of moving average cross strategy based on CHMM, and we compare it to a traditional algorithmic trading system. We set the parameter values of moving averages at common values used by market practitioners. Empirical results are presented to compare the simulation performance with the traditional algorithmic trading system using long-term daily KOSPI200 index data of more than 20 years. Our suggested trading system shows higher trading performance than naive system trading.

Relative Importance Analysis of Management Level Diagnosis for Consignee's Personal Information Protection (수탁사 개인정보 관리 수준 점검 항목의 상대적 중요도 분석)

  • Im, DongSung;Lee, Sang-Joon
    • Asia-pacific Journal of Multimedia Services Convergent with Art, Humanities, and Sociology
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    • v.8 no.2
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    • pp.1-11
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    • 2018
  • Recently ICT, new technologies such as IoT, Cloud, and Artificial Intelligence are changing the information society explosively. But personal information leakage incidents of consignee's company are increasing more and more because of the expansion of consignment business and the latest threats such as Ransomware and APT. Therefore, in order to strengthen the security of consignee's company, this study derived the checklists through the analysis of the status such as the feature of consignment and the security standard management system and precedent research. It also analyzed laws related to consignment. Finally we found out the relative importance of checklists after it was applied to proposed AHP(Analytic Hierarchy Process) Model. Relative importance was ranked as establishment of an internal administration plan, privacy cryptography, life cycle, access authority management and so on. The purpose of this study is to reduce the risk of leakage of customer information and improve the level of personal information protection management of the consignee by deriving the check items required in handling personal information of consignee and demonstrating the model. If the inspection activities are performed considering the relative importance of the checklist items, the effectiveness of the input time and cost will be enhanced.