Mastering Python for Finance - Second Edition

Logistic regression

Despite its name, logistic regression is actually a linear model used for classification. It uses a logistic function, also known as a sigmoid function, to model the probabilities describing the possible outcomes of a single trial. A logistic function helps to map any real-valued number to a value between 0 and 1. A standard logistic function is written as follows:

e is the base of the natural logarithm, and x is the X-value of the sigmoid's midpoint. is the predicted real value between 0 and 1, to be converted to a binary ...