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Machine Learning for Finance

You're reading from   Machine Learning for Finance Principles and practice for financial insiders

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Product type Paperback
Published in May 2019
Publisher Packt
ISBN-13 9781789136364
Length 456 pages
Edition 1st Edition
Languages
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Authors (2):
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Jannes Klaas Jannes Klaas
Author Profile Icon Jannes Klaas
Jannes Klaas
James Le James Le
Author Profile Icon James Le
James Le
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Table of Contents (15) Chapters Close

Machine Learning for Finance
Contributors
Preface
Other Books You May Enjoy
1. Neural Networks and Gradient-Based Optimization 2. Applying Machine Learning to Structured Data FREE CHAPTER 3. Utilizing Computer Vision 4. Understanding Time Series 5. Parsing Textual Data with Natural Language Processing 6. Using Generative Models 7. Reinforcement Learning for Financial Markets 8. Privacy, Debugging, and Launching Your Products 9. Fighting Bias 10. Bayesian Inference and Probabilistic Programming Index

Chapter 10. Bayesian Inference and Probabilistic Programming

Mathematics is a big space of which humans so far have only charted a small amount. We know of countless areas in mathematics that we would like to visit, but that are not tractable computationally.

A prime reason Newtonian physics, as well as much of quantitative finance, is built around elegant but oversimplified models is that these models are easy to compute. For centuries, mathematicians have mapped small paths in the mathematical universe that they could travel down with a pen and paper. However, this all changed with the advent of modern high-performance computing. It unlocked the ability for us to explore wider spaces of mathematics and thus gain more accurate models.

In the final chapter of this book, you'll learn about the following:

  • The empirical derivation of the Bayes formula

  • How and why the Markov Chain Monte Carlo works

  • How to use PyMC3 for Bayesian inference and probabilistic programming

  • How various methods get applied...

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