Can (and Should) Predictive Analytics be used to Forecast the Financial Performance of Business Firms in the Age of Covid-19
Predictive Analytics is the application of data mining for the purposes of forecasting and prediction. Data mining is the examination and exploitation of the patterns of correlation that exist in the data. In most applications, predictive analytics has been used to forecast probabilities in what have been termed classification problems, but there is no reason why it can’t be applied to other types of variables (such as variables measuring financial performance). Recently, people have started labeling predictive analytics as machine learning. Machine learning turns out to be just another form of data mining. Traditional data mining is equivalent to fitting a set of linear equations to the data. Machine learning with artificial neural networks is equivalent to the fitting of a set of non-linear equations to the data. Machine learning that uses Bayesian learning with diffuse priors is equivalent to traditional data mining.
In this webinar we ask two fundamental questions. First, whether or not Predictive Analytics can be used to forecast the financial performance of business firms. Second, whether Predictive Analytics should be used to forecast the financial performance of business firms (especially during the age of Covid-19). Of these two questions, should predictive analytics be used to forecast the financial performance of business firms is the more important of the two questions and hinges on the difference between correlation and causation. For forecasting causation is incredibly important, but most empirical analyses that use multiple regression analysis tend to stress correlation.
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Upcoming online lecture/webinar in Predictive Analytics
The Boston Forecasting Research Institute, Forecasting, Economic Forecasting, Macroeconomic Forecasting, Business Forecasting, Forecasting for Business, Business Planning, Strategic Planning, Business Analytics, Marketing Analytics, Predicitve Analytics, Forecasting Research, Budgeting for Business, Financial Planning for Business, Optimal Budgeting for Business