Ten Financial Applications of Machine Learning (Presentation Slides)

27 Pages Posted: 18 Jun 2018 Last revised: 26 Sep 2019

See all articles by Marcos Lopez de Prado

Marcos Lopez de Prado

Cornell University - Operations Research & Industrial Engineering; True Positive Technologies

Date Written: June 16, 2018

Abstract

Financial ML offers the opportunity to gain insight from data:
* Modelling non-linear relationships in a high-dimensional space
* Analyzing unstructured data (asynchronous, categorical)
* Learning complex patterns (hierarchical, non-parametric)
* Focusing on predictability over parametric adjudication
* Controlling for overfitting (early-stopping, cross-validation)

At the same time, Finance is not a plug-and-play subject as it relates to machine learning. Modelling financial series is harder than driving cars or recognizing faces.

In this presentation, we will review a few important financial ML applications.

For the full paper, see https://ssrn.com/abstract=3365271.

Keywords: machine learning, feature importance, prediction, out-of-sample, investments, risks, portfolio

JEL Classification: C02, D52, D53, G14

Suggested Citation

López de Prado, Marcos, Ten Financial Applications of Machine Learning (Presentation Slides) (June 16, 2018). Available at SSRN: https://ssrn.com/abstract=3197726 or http://dx.doi.org/10.2139/ssrn.3197726

Marcos López de Prado (Contact Author)

Cornell University - Operations Research & Industrial Engineering ( email )

237 Rhodes Hall
Ithaca, NY 14853
United States

HOME PAGE: http://www.orie.cornell.edu

True Positive Technologies ( email )

NY
United States

HOME PAGE: http://www.truepositive.com

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