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Cloud-Integrated Deep Reinforcement Learning for Adaptive Portfolio Risk Management in Complex Financial Systems

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Lars Eklund ¹ ,

⁴ Lund University, Sweden

Abstract

The increasingly complex and interconnected nature of global financial markets has necessitated advanced computational techniques to predict, manage, and mitigate portfolio risk. Traditional risk management approaches, including Value-at-Risk (VaR) models and classical stochastic methods, often fail to capture dynamic, nonlinear dependencies between financial instruments under conditions of uncertainty and systemic stress (Holló, Kremer, & Lo Duca, 2012; Harford, Klasa, & Maxwell, 2014). Recent developments in machine learning, particularly deep reinforcement learning (DRL), offer promising alternatives by enabling adaptive, self-learning frameworks capable of dynamically adjusting portfolio strategies in real-time. This study presents a comprehensive analysis of an intelligent cloud framework designed to leverage DRL for dynamic portfolio risk prediction, integrating both macroeconomic indicators and micro-level asset behaviors (Mirza et al., 2025). The framework accommodates evolving market conditions, liquidity constraints, and geopolitical risks, providing a scalable and responsive solution for institutional and retail investors alike. Through extensive literature review, theoretical elaboration, and critical discussion, this paper contextualizes the proposed methodology within contemporary financial theory, geoeconomics, and systemic risk modeling. The study also identifies practical limitations, including data dependency, computational intensity, and interpretability challenges inherent in DRL-based systems. Ultimately, the research underscores the potential of cloud-integrated AI techniques in augmenting financial decision-making and mitigating systemic vulnerabilities in increasingly volatile global markets.

Keywords

Deep Reinforcement Learning, Portfolio Risk, Cloud Framework, Systemic Risk

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Cloud-Integrated Deep Reinforcement Learning for Adaptive Portfolio Risk Management in Complex Financial Systems

Abstract

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