Fine-Tuning and Explaining FinBERT for Sector-Specific Financial News: A Reproducible Workflow
The increasing use of complex “black-box” models for financial news sentiment analysis presents a challenge in high-stakes settings where transparency and trust are paramount. This study introduces and validates a finance-focused, fully reproducible, open-source workflow for building, explaining, and evaluating sector-specific sentiment models mapped to standard market taxonomies and investable proxies. We benchmark interpretable and transformer-based models on public datasets and a newly constructed, manually annotated gold-standard corpus of 1500 U.S. sector-tagged financial headlines. While a zero-shot FinBERT establishes a reasonable baseline (macro F1 = 0.555), fine-tuning on our gold data yields a robust macro F1 = 0.707, a substantial uplift. We extend explainability to the fine-tuned FinBERT with Integrated Gradients (IG) and LIME and perform a quantitative faithfulness audit via deletion curves and AOPC; LIME is most faithful (AOPC = 0.365). We also quantify the risks of weak supervision: accuracy drops (−21.0%) and explanations diverge (SHAP rank ρ = 0.11) relative to gold-label training. Crucially, econometric tests show the sentiment signal is reactive, not predictive, of next-day returns; yet it still supports profitable sector strategies (e.g., Technology long-short Sharpe 1.88). Novelty lies in a finance-aligned, sector-aware, trustworthiness blueprint that pairs fine-tuned FinBERT with audited explanations and uncertainty checks, all end-to-end reproducible and tied to investable sector ETFs.
Authors
- Claudiu Brândaș (ORCID: https://orcid.org/0000-0001-9330-7340)
- Marian Pompiliu Cristescu (ORCID: https://orcid.org/0000-0003-3638-4379)
- Dumitru Alexandru Mara (ORCID: https://orcid.org/0000-0002-8898-2170)
- Petrea Ioana
Institutions
- Lucian Blaga University of Sibiu (RO)
- West University of Timişoara (RO)
Publication Details
- Journal
- Electronics
- Published
- 2025-11-27
- DOI
- https://doi.org/10.3390/electronics14234680
- Primary Topic
- Stock Market Forecasting Methods
- Type
- article
- Field-Weighted Citation Impact
- 0.00