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The complexity of your statistical model is arbitrary. For example agent-based models can consist of hundreds of thousands of heterogenous agents interacting in
by reader5000 16y ago
The complexity of your statistical model is arbitrary. For example agent-based models can consist of hundreds of thousands of heterogenous agents interacting in an economy (fitted to real data). The only requirement for a predictive model is it computes faster than reality.
- cageface 16y agoSure but that's still a fairly coarse approximation of the actual problem domain in the case of the market, right? You're making an educated guess about how much of that raw information you can ignore. You probably can ignore a lot of it but I wouldn't be surprised if a lot of the serious left-turns in the market in the last century wouldn't have been predicted by the same models that could track day-to-day trends well.