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Past, Present & The Future

Past data only cannot predict the future

Introduction

The old paradigm

Till this day, there has always been an assumption that machine learning algorithms can rely on past data to create a model which would predict the future. The flaw with this view of machine learning is that by relying on such data we're assuming that the world doesn't change and patterns don't evolve. While in some cases this could actually be true, in complex environments like the financial world it simply cannot be. The world of finance evolves all the time and the effect of each change ripples through the entire world of finance.

The new paradigm

So what is the solution? Two key additional piece of information should be added to the historical data in order to make better predictive/prescriptive models. The first piece is considering the relationship between entites (e.g. companies/assets). This will ensure that whatever algorithm we build on top of this data will be aware of the mechanism with which the data evolves. The second piece of information we need to consider is the present data. In other words, we should separate between what is historical patterns of change and what is the present state of the world. This is simply because, the present state of the world has much more influence in shaping the future direction of the finance than any other historical data.

How does our solution fit into this?

We build a constantly evolving 360° view of the financial world. Through this, we ensure that the relationships between companies and other entities are captured within our database. We also ensure that a snapshot of this data which corresponds to the present state of the financial world is separated from the historical data and thereby have a complete view of the current state of the markets. Combined with Semantic AI, we can deliver better insights than traditional methods, because we consider the historical data, inter-company and company-entity relationships as well as the present data.

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Asta

Founder & CEO

April 20, 2020