Hubble: An LLM-Driven Agentic Framework for Safe and Automated Alpha Factor Discovery

Discovering predictive alpha factors in quantitative finance remains a formidable challenge due to the vast combinatorial search space and inherently low signal-to-noise ratios in financial data. Existing automated methods, particularly genetic programming, often produce complex, uninterpretable formulas prone to overfitting. We introduce Hubble, a closed-loop factor mining framework that leverages Large Language Models (LLMs) as intelligent search heuristics, constrained by a domain-specific operator language and an Abstract Syntax Tree (AST)-based execution sandbox. The framework evaluates candidate factors through a rigorous statistical pipeline encompassing cross-sectional Rank Information Coefficient (RankIC), annualized Information Ratio, and portfolio turnover. An evolutionary feedback mechanism returns top-performing factors and structured error diagnostics to the LLM, enabling iterative refinement across multiple generation rounds. In experiments conducted on a panel of 30 U.S. equities over 752 trading days, the system evaluated 180 syntactically valid factors from 120 unique candidates across three rounds, achieving a peak composite score of 0.827 with 100% computational stability. Our results demonstrate that combining LLM-driven generation with deterministic safety constraints yields an effective, interpretable, and reproducible approach to automated factor discovery.

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Publication Details

Journal
Zenodo (CERN European Organization for Nuclear Research)
Published
2026-03-12
DOI
https://doi.org/10.5281/zenodo.18970540
Primary Topic
Stock Market Forecasting Methods
Type
article
Field-Weighted Citation Impact
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article

Hubble: An LLM-Driven Agentic Framework for Safe and Automated Alpha Factor Discovery

Cai Yuecheng, Shi Runze, Yan Shengyu, Lyu Chenxi
Zenodo (CERN European Organization for Nuclear Research)
Stock Market Forecasting Methods
article

Hubble: An LLM-Driven Agentic Framework for Safe and Automated Alpha Factor Discovery

Cai Yuecheng, Shi Runze, Yan Shengyu, Lyu Chenxi
article en

Abstract

Discovering predictive alpha factors in quantitative finance remains a formidable challenge due to the vast combinatorial search space and inherently low signal-to-noise ratios in financial data. Existing automated methods, particularly genetic programming, often produce complex, uninterpretable formulas prone to overfitting. We introduce Hubble, a closed-loop factor mining framework that leverages Large Language Models (LLMs) as intelligent search heuristics, constrained by a domain-specific operator language and an Abstract Syntax Tree (AST)-based execution sandbox. The framework evaluates candidate factors through a rigorous statistical pipeline encompassing cross-sectional Rank Information Coefficient (RankIC), annualized Information Ratio, and portfolio turnover. An evolutionary feedback mechanism returns top-performing factors and structured error diagnostics to the LLM, enabling iterative refinement across multiple generation rounds. In experiments conducted on a panel of 30 U.S. equities over 752 trading days, the system evaluated 180 syntactically valid factors from 120 unique candidates across three rounds, achieving a peak composite score of 0.827 with 100% computational stability. Our results demonstrate that combining LLM-driven generation with deterministic safety constraints yields an effective, interpretable, and reproducible approach to automated factor discovery.

Zenodo (CERN European Organization for Nuclear Research)
Quantum Technologies (Sweden) (SE)
Openalex Percentile: Top 32%
Stock Market Forecasting Methods
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