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Not just false positives in a confirm/deny scenario. It can also lead to overfitting in a modeling scenario. I once created a model that showed very strongly t
by saosebastiao 14y ago
Not just false positives in a confirm/deny scenario. It can also lead to overfitting in a modeling scenario.
I once created a model that showed very strongly that US/China exchange rates were a driver of revenue. This model was intuitive based on the market dynamics as we understood them, and they helped provide a strong predictive power which helped reduce operational costs. Over time, this model began to be taken as irrefutable truth among quite a few people in the org. Then when the economy collapsed, we very quickly learned that it wasn't US/China exchange rates that was the strong predictor, but rather something else which correlated with those rates.
Not only was the model broken, but it had now breeched trust in the ability of model based forecasts. In other words, if I were a business, I would be bankrupt.
I think the best value-add that you can possibly provide with your service is a way of helping your customers understand what is meaningful and what isn't.
- foobarqux 14y agoWhat was the actual underlying correlation?
- saosebastiao 14y agoInflation...specifically using an industrial goods index.