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qlib/qlib/portfolio/optimizer/enhanced_indexing.py
2021-03-08 19:43:03 +08:00

144 lines
4.7 KiB
Python

# Copyright (c) Microsoft Corporation.
# Licensed under the MIT License.
import numpy as np
import cvxpy as cp
import pandas as pd
from typing import Union
from qlib.portfolio.optimizer import BaseOptimizer
class EnhancedIndexingOptimizer(BaseOptimizer):
"""
Portfolio Optimizer with Enhanced Indexing
Note:
This optimizer always assumes full investment and no-shorting.
"""
START_FROM_W0 = "w0"
START_FROM_BENCH = "benchmark"
def __init__(
self,
lamb: float = 10,
delta: float = 0.4,
bench_dev: float = 0.01,
inds_dev: float = None,
scale_alpha: bool = True,
verbose: bool = False,
warm_start: str = None,
max_iters: int = 10000,
):
"""
Args:
lamb (float): risk aversion parameter (larger `lamb` means less focus on return)
delta (float): turnover rate limit
bench_dev (float): benchmark deviation limit
inds_dev (float/None): industry deviation limit, set `inds_dev` to None to ignore industry specific
restriction
scale_alpha (bool): if to scale alpha to match the volatility of the covariance matrix
verbose (bool): if print detailed information about the solver
warm_start (str): whether try to warm start (`w0`/`benchmark`/``)
(https://www.cvxpy.org/tutorial/advanced/index.html#warm-start)
"""
assert lamb >= 0, "risk aversion parameter `lamb` should be positive"
self.lamb = lamb
assert delta >= 0, "turnover limit `delta` should be positive"
self.delta = delta
assert bench_dev >= 0, "benchmark deviation limit `bench_dev` should be positive"
self.bench_dev = bench_dev
assert inds_dev is None or inds_dev >= 0, "industry deviation limit `inds_dev` should be positive or None."
self.inds_dev = inds_dev
assert warm_start in [
None,
self.START_FROM_W0,
self.START_FROM_BENCH,
], "illegal warm start option"
self.start_from_w0 = warm_start == self.START_FROM_W0
self.start_from_bench = warm_start == self.START_FROM_BENCH
self.scale_alpha = scale_alpha
self.verbose = verbose
self.max_iters = max_iters
def __call__(
self,
u: Union[np.ndarray, pd.Series],
F: np.ndarray,
covB: np.ndarray,
varU: np.ndarray,
w0: np.ndarray,
w_bench: np.ndarray,
inds_onehot: np.ndarray = None,
) -> Union[np.ndarray, pd.Series]:
"""
Args:
u (np.ndarray or pd.Series): expected returns (a.k.a., alpha)
F, covB, varU (np.ndarray): see StructuredCovEstimator
w0 (np.ndarray): initial weights (for turnover control)
w_bench (np.ndarray): benchmark weights
inds_onehot (np.ndarray): industry (onehot)
Returns:
np.ndarray or pd.Series: optimized portfolio allocation
"""
assert inds_onehot is not None or self.inds_dev is None, "Industry onehot vector is required."
# transform dataframe into array
if isinstance(u, pd.Series):
u = u.values
# scale alpha to match volatility
if self.scale_alpha:
u = u / u.std()
x_variance = np.mean(np.diag(F @ covB @ F.T) + varU)
u *= x_variance ** 0.5
w = cp.Variable(len(u)) # num_assets
v = w @ F # num_factors
ret = w @ u
risk = cp.quad_form(v, covB) + cp.sum(cp.multiply(varU, w ** 2))
obj = cp.Maximize(ret - self.lamb * risk)
d_bench = w - w_bench
cons = [
w >= 0,
cp.sum(w) == 1,
d_bench >= -self.bench_dev,
d_bench <= self.bench_dev,
]
if self.inds_dev is not None:
d_inds = d_bench @ inds_onehot
cons.append(d_inds >= -self.inds_dev)
cons.append(d_inds <= self.inds_dev)
if w0 is not None:
turnover = cp.sum(cp.abs(w - w0))
cons.append(turnover <= self.delta)
warm_start = False
if self.start_from_w0:
if w0 is None:
print("Warning: try warm start with w0, but w0 is `None`.")
else:
w.value = w0
warm_start = True
elif self.start_from_bench:
w.value = w_bench
warm_start = True
prob = cp.Problem(obj, cons)
prob.solve(solver=cp.SCS, verbose=self.verbose, warm_start=warm_start, max_iters=self.max_iters)
if prob.status != "optimal":
print("Warning: solve failed.", prob.status)
return np.asarray(w.value)