Summary:  Communicating with your Board of Directors about AI/ML is different from conversations with top operating executive.  It’s increasingly likely your Board will want to know more and planning that communication in advance will make your presentation more successful.

As AI/ML becomes increasingly…

Deep Learning is picking momentum in Quantitative Finance, outside the obvious application to the prediction of asset prices (where to my knowledge it is not particularly effective) and spreading into the more serious application area of option pricing and risk management.

These two recent papers clearly demonstrate the benefits of DL as a pricing technology alternative to the classical FDM and Monte-Carlo in certain contexts:…

While a reliable method to accurately identify suicidal patients is missing from medical literature, researchers…

Big Data tools not only simplify lengthy analytical procedures in any industry, but they also provide a competitive advantage to banks. With new regulations, banks are looking at ways to make compliance procedures more effective and accurate. Big Data in banking is slowly gaining momentum and becoming an inevitable necessity across the banking industry. As traditional…

Below are some images generated by an algorithm that I originally created to study stocks. The stock in this case is Yahoo! in the early 2000s. I realize that none of these images resemble conventional stock market patterns. Keep in mind that algorithms by nature interact with the data. They don't simply restate the numbers in graphical form. An algorithm designed to deal with historical stock trading data can be modified to deal with the data in real-time. However, there is no inherent…

I had some magical moments in my life. Perhaps the most magical was the summer I went to work wearing shorts and running shoes. Captain C. said to me, as I sat in our shared office, “If you want to work during the weekend, you can borrow the keys to the building.” It didn’t seem like a big deal at the time. I had already borrowed a military vehicle that, as per Captain C., I could park anywhere in Canada without receiving a parking ticket. So I borrowed the keys to the building. I went…

Previous Relevant Posts

• Single regression with R to identify relationship between WTI and stock price of Exxon
• Getting stock volatility in R & Getting Histogram of returns

What is CAPM?

According to the investopedia (…

It’s 5:05pm EST. Bob, CFO of ABC Inc is about to get on an earnings call after just reporting a 20% miss on earnings due to slower revenue growth than forecasted. Company ABC’s stock price is plummeting, down 25% in extended hour trading. The board is furious and investors demand answers on the discrepancies.

Inaccurate revenue forecast remains one of the…

By Greta Roberts.

It’s exciting to watch advances in predictive and prescriptive employee solutions. A public HR technology company recently announced the release of an application enabling employers to “identify which employee is likely to quit, and what options need to be considered to retain that…

By Greta Roberts, CEO, Talent Analytics, Corp.

Imagine that Chris wants to buy a house and needs a mortgage. He applies online and is sent an email by an intern asking to schedule time to discuss his interest. The intern conducts the initial screening conversation, they schedule him for an in person interview during which time he is interviewed by quite a few folks who ask many questions.…

When I talk about "the institutional response," I am referring to an increasingly common occurrence: a standardized or large-scale approach is supported, promoted, and applied by a particular institution - sometimes governmental in nature - premised on its apparent suitability or superiority to achieve desirable outcomes. I suspect that in recent years, there has been a push to get citizens to file their income tax returns electronically. I know that in Canada, it has become difficult…

"Measurement owes its existence to Earth; estimation of quantity to measurement; calculation to estimation of quantity; balancing of chances to calculation; and victory to balancing of chances." - Sun Tzu, The Art of War (Translated by L. Giles)

The quote from Sun Tzu seems to suggest how a military leader gathers data; adapts to different situations; and makes decisions weighing the circumstances. It says that the balancing of chances depends on "calculation." I…

I made a recent discovery that I would like to share with the community. In my previous blog, I introduced a special algorithmic shell that distributes stocks based on their price movements (along the x-axis) and volume movements (y-axis). Using this shell, it is possible to visualize the trading behaviours of dozens of stocks simultaneously. I noticed one day that the stocks seemed to be lining up in formation. I decided to test the accuracy of my visual interpretation. Below I present the…

Given the nature of the community, presumably many visitors already have a strong understanding of the nature of quantitative data. Perhaps more mysterious is the idea of qualitative data especially since it can sometimes be expressed in quantitative terms. For instance, "stress" as an internal response to an externality differs from person to person; yet it would be possible to canvas a large number of people and express stress levels as an aggregate based on a perceptual gradient: minimal,…

I tend to examine the different roles played by data. For instance, when I work on computer code, I often ask myself what the presence of data is meant to accomplish. Sometimes the analysis is not at all straightforward or simple. In society and organizations, people exist and persist in the records as data. The data survives even as employees come and go. I therefore consider it important to regard the data and its environment as a system in itself, something that has a life all of its own.…

There was a television interview of a man who had to deal with severe breathing problems through much of his adult life.  He underwent various procedures although he found little relief.  In fact, the adverse impact to his body was long-lasting.  So he was surprised to discover how he was extremely allergic to his breakfast cereal, something that he ate almost without fail.  When he stopped eating the cereal, his breathing problems disappeared.  I am sure that many people would regard the…

I have always had a great interest in how businesses organize in order to get things done.  Here I raise some discussion points intended to stimulate debate.

Principle of Systemic Domains 

Not that long ago, I was completing a graduate degree in “critical” disability studies.  The critical part deserves to be in quotations since it is probably subject to interpretation and all sorts of misinterpretation.  I am going to suggest that in critical…

The commodification of labour coincides with technological advancements in production: it is perhaps most noticeable in relation to factories.  Factory processes replaced the labour once done by skilled tradespeople. It might not be obvious how this trend has continued to this day and is now affecting professionals in complex fields including those in the data sectors. I am talking about the "made to order" and "off the shelf" acquisition of labour commodities. What I describe as commodities…

Technology to store, manage, search and analyze Big Data leaps to the top of the agenda for Financial Institutions as enterprise NoSQL databases come of age.

Financial Institutions are focused on initiatives to survive in a world where regulatory pressure, risk mitigation and increasing volumes of data continue to pressure legacy infrastructures. Improved…

J.D. Opdyke and Alex Cavallo

In operational risk measurement, the estimation of severity distribution parameters is the main driver of capital estimates, yet this remains a non-trivial challenge for many reasons.  Maximum likelihood estimation (MLE) does not adequately meet this challenge because of its well-documented non-robustness to modest violations of idealized textbook model assumptions, specifically that the data are independent and identically distributed (i.i.d.), which is…