
Автор: Deepak Kanungo
Издательство: O’Reilly Media, Inc.
Год: 2022-12-21
Страниц: 143
Язык: английский
Формат: pdf, epub (true), mobi
Размер: 10.2 MB
Whether based on academic theories or machine learning strategies, all financial models are at the mercy of modeling errors that can be mitigated but not eliminated. Probabilistic ML technologies are based on a simple and intuitive definition of probability and the rigorous calculus of probability theory. These systems treat uncertainties and errors of financial and investing systems as features, not bugs. And they quantify uncertainty generated from inexact inputs and outputs as probability distributions, not point estimates. This makes for realistic financial inferences and predictions that are useful for decision-making and risk management. These systems are capable of warning us when their inferences and predictions are no longer useful in the current market environment.