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Python for Finance Cookbook - Second Edition

You're reading from  Python for Finance Cookbook - Second Edition

Product type Book
Published in Dec 2022
Publisher Packt
ISBN-13 9781803243191
Pages 740 pages
Edition 2nd Edition
Languages
Author (1):
Eryk Lewinson Eryk Lewinson
Profile icon Eryk Lewinson

Table of Contents (18) Chapters

Preface Acquiring Financial Data Data Preprocessing Visualizing Financial Time Series Exploring Financial Time Series Data Technical Analysis and Building Interactive Dashboards Time Series Analysis and Forecasting Machine Learning-Based Approaches to Time Series Forecasting Multi-Factor Models Modeling Volatility with GARCH Class Models Monte Carlo Simulations in Finance Asset Allocation Backtesting Trading Strategies Applied Machine Learning: Identifying Credit Default Advanced Concepts for Machine Learning Projects Deep Learning in Finance Other Books You May Enjoy
Index

Exploring explainable AI techniques

In one of the previous recipes, we looked into feature importance as one of the means of getting a better understanding of how the models work under the hood. While this might be quite a simple task in the case of linear regression, it gets increasingly difficult with the complexity of the models.

One of the big trends in the ML/DL field is explainable AI (XAI). It refers to various techniques that allow us to better understand the predictions of black box models. While the current XAI approaches will not turn a black box model into a fully interpretable one (or a white box), they will definitely help us better understand why the model returns certain predictions for a given set of features.

Some of the benefits of having explainable AI models are as follows:

  • Builds trust in the model—if the model’s reasoning (via its explanation) matches common sense or the beliefs of human experts, it can strengthen the trust in...
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