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AlphaRLM: Aligning Language Models for Literature-Grounded Symbolic Factor Discovery

Author

Listed:
  • Jie Huang
  • Yuecheng Hong
  • Yao Chen
  • Hao Zhong
  • Linfeng Xiao
  • Xudong Liu
  • Qiang Ye
  • Hao Xia
  • Jianxuan Xin

Abstract

Formulaic alpha mining seeks to discover executable expressions that capture predictive market signals in a vast, noisy search space. Recent LLM-based approaches use prompting, iterative search, or seed-factor evolution, leaving direct factor construction through policy learning less explored. To address this, we introduce AlphaRLM, a reinforcement-learning framework that trains LLMs to construct executable symbolic factors from financial literature without input factor expressions. AlphaRLM incorporates Literature-Guided Operator Assembly (LEGO), which conditions factor construction on literature-derived ideas and executable operators, providing semantic priors for exploration. It further aligns the generation policy with market feedback through executable-validity and grouped-return-separation rewards that capture non-monotonic structures across factor quantiles. Extensive experiments on CSI 300, CSI 1000, and S&P 500 show that AlphaRLM outperforms strong factor-mining and LLM-based baselines in annualized excess return. Notably, the 8B model achieves strong cross-market performance, highlighting the promise of literature-conditioned, market-aligned factor generation.

Suggested Citation

  • Jie Huang & Yuecheng Hong & Yao Chen & Hao Zhong & Linfeng Xiao & Xudong Liu & Qiang Ye & Hao Xia & Jianxuan Xin, 2026. "AlphaRLM: Aligning Language Models for Literature-Grounded Symbolic Factor Discovery," Papers 2610.14959, arXiv.org, revised Oct 2026.
  • Handle: RePEc:arx:papers:2610.14959
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    References listed on IDEAS

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