“probabilistic Machine Learning For Finance And Investing” Excerpt From: Deepak Kanungo. “probabilistic Machine Learning For Finance And Investing.” Ibooks.

There are several reasons why probabilistic machine learning represents the next-generation ML framework and technology for finance and investing. This generative ensemble learns continually from small and noisy financial datasets while seamlessly enabling probabilistic inference, retrodiction, prediction, and counterfactual reasoning. Probabilistic ML also lets you systematically encode personal, empirical, and institutional knowledge into ML models.

Whether based on academic theories or discovered empirically by humans and machines, 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.

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.