Abstract
We present a neuro-symbolic framework that pairs online-adaptive Fuzzy Cognitive Maps (FCMs) with long short-term memory (LSTM) networks for financial forecasting. Financial markets exhibit regime shifts and nonlinear dynamics. Existing models often trade off one of these key properties: these models capture temporal patterns but hide causal drivers, or they recover causal graphs that cannot adapt post-training. We close this gap with two frameworks. Framework I constructs an FCM from live dual-source price series and macroeconomic indicators, and adapts its edges online through an error-driven Hebbian rule. We introduce the Asymmetric Additive Residual Fusion method to seamlessly combine the FCM and LSTM predictions under Framework I. Framework II constructs a literature-grounded, LLM-augmented FCM where every edge carries a verifiable citation that gives an auditable map of factor interactions. On NASDAQ Composite data, Framework I matched the performance of the LSTM baseline on state-directional accuracy and outperformed LSTM by 7.6 percentage points on the return-sign accuracy. Framework I outperformed standalone FCM models across both evaluation metrics. The adaptive maps converged to new regimes within 10-15 trading days, and Framework II center-node FCMs scored 68.9% to 85.7% on the state-directional accuracy.
Abstract (translated)
URL
https://arxiv.org/abs/2611.13388
