Predictive Analysis : What is the "real deal"?

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A chance suggestion by a friend about a company working on *predictive analysis* and my subsequent "assiduous research" on it (ok ok one Google search..) and after perusing a couple of white papers on the topic I have to admit I am hooked. The lib...
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hi guys
i read the articles regarding PA and it opens up another career option for me.

Thanks B

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Puys, I'm interested in the field, the current global meltdown notwithstanding.. as a fallout of the subprime factor. Can anyone throw some insights regarding which companies offer predictive analysis in India? & the related qualifications required in Math (Level)/IT-- Excel, any programming required? Also, which bschools offer campus placements in this field.. beyond the IIMs/XL?

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Well ur the real deal then! Am not the right person to suggest options, since I have never investigated them! Wish you the best for future efforts.

On a different note, it is quite introspective to read the other posts in this thread post the subprime crisis. Written 2 yrs ago, so much has changed now!

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Hello,

Thanks for your time and reply buddy!!

I am genuinely interested in core financial modeling. I already know control theory and Stoichastic theory and want to apply computer and mathematical knowledge to finance. So I am looking for a distant learning course like CFA type as in long run, I am intrested in doing MBA in finance or general MBA by next year.

Can you suggest a good postal course for this.

Thanks,

nikhil

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@Nikhil : Am curious - Are you interested in financial modelling because of your IT background and software skills or because you are keen on finance? If its the former, things may not workout as expected because financial modelling is done by finance guys who pickup tool skills (such as MS excel) for meeting their work rquirements, rather than an computer saavy guy using his software knowledge for finance applications. Such a person may fit the role of a techno-functional analyst in an IT company better than in the finance sector.

IFMR is a little known Business school in Chennai, which offers a 2 year course in quant heavy finance. Folks who pass out get involved in analytical finance. Have visited the school and though it can't boast of a great campus and other accessories, a lot of high end work in finance is happening there. I think it has great potential and will emerge as a top bschool in a decade or so. They don't market themselves, so are not as well known.

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hi,

I am a embedded software engineer having around 7 years of work experience in top wireless embedded companies. I also have a masters degree from iit in comp science. I am intrested in doing MBA in fiance and enter into field of financial modelling but I am not sure which course is hte right one for this line. I am preparing for GMAT and cannot give GRE again (already given it once 7 yrs back).

Experts here please suggest a gud course or starting step for me. I thought of CFA but I am wondering if it is the right course for me?

Thannks alot for reading my mail.

-nikhil

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I will give a generalist insight...

All these predictive Analytics stuff, Models and the stuff are the latest Business Jargons and will fad way as fast as they have appeared to take over the scene.

LTCM was staffed by Ph.D.s and most of its partners were Ph.D.s It operated strictly on the basis of Models. And according to them the event when they will lose more than 2% of their capital in a single day or >10% in a month was a 10 sigma one and wud not occur.

Yet that 10 sigma event happened for 3 months in 1998 leading to the massacre of LTCM Partner's personal wealth.

The problem with all this analytic and predictive stuff is that they fail to take into account the human emotions. They always try to operate the fture on the basis of past. And that is dangerous thing to do.

However there is still hope that combined with quick and intuitive decision making these Models (if modified a little bit to incorporate some aberrative behavior) can drive the future of art of Investing.

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Most mortgage banks/IB captives in India work in this field. also popularly known as Analytics. small no. of ppl recruited from IIT's, IIsc, ISI and similar with Maths/stat background (toppers).

they model markets and behaviour.
In BFSI: modelling loan risk, mortgage backed security behaviour in Wall street etc. Uses stock exchange data as base for predicting trends figuring in macro-environmental factors

In Retail: Product vs. consumer behaviour etc

Has applications in military, space, pharma/drug research and similar. Uses Operations research as a base.

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This field is BIG man ...especially in the financial services industry.Lots of hedge Funds and Investments Banks use techniques in pattern recognition etc to gain an edge in the markets.Or take the case of someone like James Harris Simmons a Harvard Math professor who left teaching maths and started his own Hedge Fund- Renaissance which uses computer-based models to predict price changes in easily-traded financial instruments. These models are based on analyzing as much data as can be gathered, then looking for non-random movements to make predictions.
Last year he raked in a cool $1.5 billion for himself and consider the fact that the famous George Soros could manage only about $750 million.

To whet your appetite further read this superb article..
Outsmarting The Market

Today the I banks and Hedge Funds are a major recruiter of Ph.d's in physics/engineering/Finance..The jobs are so lucrative that these days one of the most sought after Phd programs in the US is in signal processing not becuse of the students underlying intrest in Electrical Engineering but beacuse the concepts used over there makes them a hot property in the job market.

The best recourse probably on this topic is Wilmott Serving The Quantitative Finance Community Home which has a foroum more prolific than PG with most of the users being Ph.D students!!!!

Apart form finance there are any number of Analytics firms serving diverse interests such as market research to strategy ,in India many companies like Inductis,ZS ,Global Analytics,Modelytics are into this field.A group of IITB students have even launched a startup which caters to political parties.They use data analysis techniques to identify trends as to when and where should campaign money be spent which developmental activities will yield maximum votes etc..



Happy hunting....

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A chance suggestion by a friend about a company working on predictive analysis and my subsequent "assiduous research" on it (ok ok one Google search..) and after perusing a couple of white papers on the topic I have to admit I am hooked. The liberal use of "analysis" ,"math","logic","patterns" etc are the magic words which piqued my curiosity.
The following links should give an idea if what I am saying is mumbo jumbo to you ( Well until couple of days back it was to me..)

Predictive analytics - Wikipedia, the free encyclopedia
Predictive Analytics with Data Mining: How It Works

But then again what is the real deal?" :huh: The fundoo ideas apart what kind of work does one exactly end up doing? Is there anyone here who is working on the thing or have an idea about it? I dont see many big players working on this...
How is the company www.latentview.com ? It's a relatively new company.

The possibilities with this seem endless...but I wonder how I didnt hear about it before. Or Was I really living under the cave? :huh:

Any further info and clarity on this will be much appreciated!

Girish...!

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