From the course: Advanced Python in Excel for Finance: A Hands-On Approach
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Predictive models for financial data
From the course: Advanced Python in Excel for Finance: A Hands-On Approach
Predictive models for financial data
- [Instructor] Let's gear up to unlock the potential of predictive modeling in finance. Before we jump into coding, let's lay the groundwork by understanding what predictive modeling is and why it's a cornerstone in financial analysis. Predictive modeling is a statistical technique using historical data to predict future events. In finance, it plays a crucial role by forecasting future financial trends like stock prices, market movements, and economic conditions. By leveraging predictive modeling, financial analysts can make informed decisions, optimize investment strategies, and mitigate risks. This understanding is crucial as it frames our approach to building effective models. The quality of our predictive models heavily relies on the data they're trained on. This, now, capitalizes the need for cleaning and pre-processing. This caters for the missing values in case of any entries, outliers, and feature selection. By preparing our data meticulously, we ensure our models are trained…
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