Book Image

Machine Learning for Finance

By : Jannes Klaas
Book Image

Machine Learning for Finance

By: Jannes Klaas

Overview of this book

Machine Learning for Finance explores new advances in machine learning and shows how they can be applied across the financial sector, including insurance, transactions, and lending. This book explains the concepts and algorithms behind the main machine learning techniques and provides example Python code for implementing the models yourself. The book is based on Jannes Klaas’ experience of running machine learning training courses for financial professionals. Rather than providing ready-made financial algorithms, the book focuses on advanced machine learning concepts and ideas that can be applied in a wide variety of ways. The book systematically explains how machine learning works on structured data, text, images, and time series. You'll cover generative adversarial learning, reinforcement learning, debugging, and launching machine learning products. Later chapters will discuss how to fight bias in machine learning. The book ends with an exploration of Bayesian inference and probabilistic programming.
Table of Contents (15 chapters)
Machine Learning for Finance
Contributors
Preface
Other Books You May Enjoy
Index

Unsupervised learning


While supervised learning has made great advances over the last few years, most of this book will focus on working with labeled examples. However, sometimes we may not have labels. In this case, we can still use machine learning to find hidden patterns in data.

Clustering is a common form of unsupervised learning

Imagine a company that has a number of customers for its products. These customers can probably be grouped into different market segments, but what we don't know is what the different market segments are. We also cannot ask customers which market segment they belong to because they probably don't know. Which market segment of the shampoo market are you? Do you even know how shampoo firms segment their customers?

In this example, we would like an algorithm that looks at a lot of data from customers and groups them into segments. This is an example of unsupervised learning.

This area of machine learning is far less developed than supervised learning, but it still holds great potential.