• Asia pacific journal of information systems
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• v.19 no.2
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• pp.157-178
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• 2009

Corporate credit rating is a very important factor in the market for corporate debt. Information concerning corporate operations is often disseminated to market participants through the changes in credit ratings that are published by professional rating agencies, such as Standard and Poor's (S&P) and Moody's Investor Service. Since these agencies generally require a large fee for the service, and the periodically provided ratings sometimes do not reflect the default risk of the company at the time, it may be advantageous for bond-market participants to be able to classify credit ratings before the agencies actually publish them. As a result, it is very important for companies (especially, financial companies) to develop a proper model of credit rating. From a technical perspective, the credit rating constitutes a typical, multiclass, classification problem because rating agencies generally have ten or more categories of ratings. For example, S&P's ratings range from AAA for the highest-quality bonds to D for the lowest-quality bonds. The professional rating agencies emphasize the importance of analysts' subjective judgments in the determination of credit ratings. However, in practice, a mathematical model that uses the financial variables of companies plays an important role in determining credit ratings, since it is convenient to apply and cost efficient. These financial variables include the ratios that represent a company's leverage status, liquidity status, and profitability status. Several statistical and artificial intelligence (AI) techniques have been applied as tools for predicting credit ratings. Among them, artificial neural networks are most prevalent in the area of finance because of their broad applicability to many business problems and their preeminent ability to adapt. However, artificial neural networks also have many defects, including the difficulty in determining the values of the control parameters and the number of processing elements in the layer as well as the risk of over-fitting. Of late, because of their robustness and high accuracy, support vector machines (SVMs) have become popular as a solution for problems with generating accurate prediction. An SVM's solution may be globally optimal because SVMs seek to minimize structural risk. On the other hand, artificial neural network models may tend to find locally optimal solutions because they seek to minimize empirical risk. In addition, no parameters need to be tuned in SVMs, barring the upper bound for non-separable cases in linear SVMs. Since SVMs were originally devised for binary classification, however they are not intrinsically geared for multiclass classifications as in credit ratings. Thus, researchers have tried to extend the original SVM to multiclass classification. Hitherto, a variety of techniques to extend standard SVMs to multiclass SVMs (MSVMs) has been proposed in the literature Only a few types of MSVM are, however, tested using prior studies that apply MSVMs to credit ratings studies. In this study, we examined six different techniques of MSVMs: (1) One-Against-One, (2) One-Against-AIL (3) DAGSVM, (4) ECOC, (5) Method of Weston and Watkins, and (6) Method of Crammer and Singer. In addition, we examined the prediction accuracy of some modified version of conventional MSVM techniques. To find the most appropriate technique of MSVMs for corporate bond rating, we applied all the techniques of MSVMs to a real-world case of credit rating in Korea. The best application is in corporate bond rating, which is the most frequently studied area of credit rating for specific debt issues or other financial obligations. For our study the research data were collected from National Information and Credit Evaluation, Inc., a major bond-rating company in Korea. The data set is comprised of the bond-ratings for the year 2002 and various financial variables for 1,295 companies from the manufacturing industry in Korea. We compared the results of these techniques with one another, and with those of traditional methods for credit ratings, such as multiple discriminant analysis (MDA), multinomial logistic regression (MLOGIT), and artificial neural networks (ANNs). As a result, we found that DAGSVM with an ordered list was the best approach for the prediction of bond rating. In addition, we found that the modified version of ECOC approach can yield higher prediction accuracy for the cases showing clear patterns.

• Journal of Intelligence and Information Systems
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• v.17 no.3
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• pp.25-41
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• 2011

Recently, support vector machines (SVMs) are being recognized as competitive tools as compared with other data mining techniques for solving pattern recognition or classification decision problems. Furthermore, many researches, in particular, have proved them more powerful than traditional artificial neural networks (ANNs) (Amendolia et al., 2003; Huang et al., 2004, Huang et al., 2005; Tay and Cao, 2001; Min and Lee, 2005; Shin et al., 2005; Kim, 2003).The classification decision, such as a binary or multi-class decision problem, used by any classifier, i.e. data mining techniques is so cost-sensitive particularly in financial classification problems such as the credit ratings that if the credit ratings are misclassified, a terrible economic loss for investors or financial decision makers may happen. Therefore, it is necessary to convert the outputs of the classifier into wellcalibrated posterior probabilities-based multiclass credit ratings according to the bankruptcy probabilities. However, SVMs basically do not provide such probabilities. So it required to use any method to create the probabilities (Platt, 1999; Drish, 2001). This paper applied AdaBoost algorithm-based support vector machines (SVMs) into a bankruptcy prediction as a binary classification problem for the IT companies in Korea and then performed the multi-class credit ratings of the companies by making a normal distribution shape of posterior bankruptcy probabilities from the loss functions extracted from the SVMs. Our proposed approach also showed that their methods can minimize the misclassification problems by adjusting the credit grade interval ranges on condition that each credit grade for credit loan borrowers has its own credit risk, i.e. bankruptcy probability.

• Journal of the Korea Institute of Information and Communication Engineering
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• v.22 no.9
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• pp.1153-1158
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• 2018

Online customer evaluations and social media information among a variety of information sources are critical for businesses as it influences the customer's decision making. There are limitations on the time and money that the survey will ask to identify a variety of customers' needs and complaints. The customer review data at online shopping malls provide the ideal data sources for analyzing customer sentiment about their products. In this study, we collected product reviews data on the smartphone of Samsung and Apple from Amazon. We applied five classification algorithms which are used as representative sentiment analysis techniques in previous studies. The five algorithms are based on support vector machines, bagging, random forest, classification or regression tree and maximum entropy. In this study, we proposed entropy score which can comprehensively evaluate the performance of classification algorithm. As a result of evaluating five algorithms using an entropy score, the SVMs algorithm's entropy score was ranked highest.

• Journal of KIISE:Software and Applications
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• v.35 no.1
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• pp.41-49
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• 2008

Fingerprint classification is useful to reduce the matching time of a huge fingerprint identification system by categorizing fingerprints into predefined classes according to their global features. Although global features are distributed diversly because of the uniqueness of a fingerprint, previous fingerprint classification methods extract global features non-adaptively from the fixed region for every fingerprint. We propose an novel method that extracts features adaptively for each fingerprint in order to classify various fingerprints effectively. It extracts ridge directional values as feature vectors from the region after searching the feature region by calculating variations of ridge directions, and classifies them using support vector machines. Experimental results with NIST4 database show that we have achieved a classification accuracy of 90.3% for the five-class problem and 93.7% for the four-class problem, and proved the validity of the proposed adaptive method by comparison with non-adaptively extracted feature vectors.

• Journal of Intelligence and Information Systems
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• v.17 no.4
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• pp.241-254
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• 2011

Financial time-series forecasting is one of the most important issues because it is essential for the risk management of financial institutions. Therefore, researchers have tried to forecast financial time-series using various data mining techniques such as regression, artificial neural networks, decision trees, k-nearest neighbor etc. Recently, support vector machines (SVMs) are popularly applied to this research area because they have advantages that they don't require huge training data and have low possibility of overfitting. However, a user must determine several design factors by heuristics in order to use SVM. For example, the selection of appropriate kernel function and its parameters and proper feature subset selection are major design factors of SVM. Other than these factors, the proper selection of instance subset may also improve the forecasting performance of SVM by eliminating irrelevant and distorting training instances. Nonetheless, there have been few studies that have applied instance selection to SVM, especially in the domain of stock market prediction. Instance selection tries to choose proper instance subsets from original training data. It may be considered as a method of knowledge refinement and it maintains the instance-base. This study proposes the novel instance selection algorithm for SVMs. The proposed technique in this study uses genetic algorithm (GA) to optimize instance selection process with parameter optimization simultaneously. We call the model as ISVM (SVM with Instance selection) in this study. Experiments on stock market data are implemented using ISVM. In this study, the GA searches for optimal or near-optimal values of kernel parameters and relevant instances for SVMs. This study needs two sets of parameters in chromosomes in GA setting : The codes for kernel parameters and for instance selection. For the controlling parameters of the GA search, the population size is set at 50 organisms and the value of the crossover rate is set at 0.7 while the mutation rate is 0.1. As the stopping condition, 50 generations are permitted. The application data used in this study consists of technical indicators and the direction of change in the daily Korea stock price index (KOSPI). The total number of samples is 2218 trading days. We separate the whole data into three subsets as training, test, hold-out data set. The number of data in each subset is 1056, 581, 581 respectively. This study compares ISVM to several comparative models including logistic regression (logit), backpropagation neural networks (ANN), nearest neighbor (1-NN), conventional SVM (SVM) and SVM with the optimized parameters (PSVM). In especial, PSVM uses optimized kernel parameters by the genetic algorithm. The experimental results show that ISVM outperforms 1-NN by 15.32%, ANN by 6.89%, Logit and SVM by 5.34%, and PSVM by 4.82% for the holdout data. For ISVM, only 556 data from 1056 original training data are used to produce the result. In addition, the two-sample test for proportions is used to examine whether ISVM significantly outperforms other comparative models. The results indicate that ISVM outperforms ANN and 1-NN at the 1% statistical significance level. In addition, ISVM performs better than Logit, SVM and PSVM at the 5% statistical significance level.

• Journal of the Korean Society for information Management
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• v.22 no.3 s.57
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• pp.261-287
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• 2005

The purpose of this paper is to explore the ways to improve the performance of SVM (Support Vector Machines) text classifier using inter-document similarities. SVMs are powerful machine learning systems, which are considered as the state-of-the-art technique for automatic document classification. In this paper text categorization via SVMs approach based on feature representation with document vectors is suggested. In this approach, document vectors instead of index terms are used as features, and vector similarities instead of term weights are used as feature values. Experiments show that SVM classifier with document vector features can improve the document classification performance. For the sake of run-time efficiency, two methods are developed: One is to select document vector features, and the other is to use category centroid vector features instead. Experiments on these two methods show that we can get improved performance with small vector feature set than the performance of conventional methods with index term features.

• Proceedings of the Korean Institute of Information and Commucation Sciences Conference
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• 2014.05a
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• pp.89-93
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• 2014

Reviews are very important for potential consumer' making choices. They are also used by manufacturers to find problems of their products and to collect competitors' business information. But someone write fake reviews to mislead readers to make wrong choices. Therefore detecting fake reviews is an important problem for the E-commerce sites. Support Vector Machines (SVMs) are very important text classification algorithms with excellent performance. In this paper, we propose a new incremental algorithm based on weight and the extension of Karush-Kuhn-Tucker(KKT) conditions and Convex Hull for online Review Spam Detection. Finally, we analyze its performance in theory.

• KIPS Transactions on Software and Data Engineering
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• v.5 no.9
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• pp.433-440
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• 2016

Railway point machines act as actuators that provide different routes to trains by driving switchblades from the current position to the opposite one. Since point failure can significantly affect railway operations with potentially disastrous consequences, early stress detection of point machine is critical for monitoring and managing the condition of rail infrastructure. In this paper, we propose a stress detection method for point machine in railway condition monitoring systems using sound data. The system enables extracting sound feature vector subset from audio data with reduced feature dimensions using feature subset selection, and employs support vector machines (SVMs) for early detection of stress anomalies. Experimental results show that the system enables cost-effective detection of stress using a low-cost microphone, with accuracy exceeding 98%.

• Molecules and Cells
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• v.27 no.5
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• pp.547-556
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• 2009

Parathyroid hormone is the most important endocrine regulator of calcium concentration. Its N-terminal fragment (1-34) has sufficient activity for biological function. Recently, site-directed mutagenesis studies demonstrated that substitutions at several positions within shorter analogues (1-14) can enhance the bioactivity to greater than that of PTH (1-34). However, designing the optimal sequence combination is not simple due to complex combinatorial problems. In this study, support vector machines were introduced to predict the biological activity of modified PTH (1-14) analogues using mono-substituted experimental data and to analyze the key physicochemical properties at each position that correlated with bioactivity. This systematic approach can reduce the time and effort needed to obtain desirable molecules by bench experiments and provide useful information in the design of simpler activating molecules.

• 제어로봇시스템학회:학술대회논문집
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• 2005.06a
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• pp.2337-2341
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• 2005

This paper presents the target detection method using Support Vector Machines(SVMs) and the navigation system using behavior-based fuzzy controller. SVM is a machine-learning method based on the principle of structural risk minimization, which performs well when applied to data outside the training set. We formulate detection of target objects as a supervised-learning problem and apply SVM to detect at each location in the image whether a target object is present or not. The behavior-based fuzzy controller is implemented as an individual priority behavior: the highest level behavior is target-seeking, the middle level behavior is obstacle-avoidance, the lowest level is an emergency behavior. We have implemented and tested the proposed method in our mobile robot "Pioneer2-AT". Comparing with a neural-network based detection method, a SVM illustrate the excellence of the proposed method.