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Practical Predictive Analytics by Ralph Winters

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Two different ways to look at predictive analytics

Various industries interpret the goals of predictive analytics differently. For example, social science and marketing like to understand the factors which go into a model, and can sacrifice a bit of accuracy if a model can be explained well enough. On the other hand, a black box stock trading model is more interested in minimizing the number of bad trades, and at the end of the day tallies up the gains and losses, not really caring which parts of the trading algorithm worked. Accuracy is more important in the end.

Depending upon how you intend to approach a particular problem, look at how two different analytical mindsets can affect the predictive analytics process:

  1. Minimize prediction error ...

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