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Welcome to Synapse!
News from NeuralWare and its Partners March 2005

 

In this issue...

 

Predicting Investment Trends: A Customer Story

Tech Tips

Take the NeuralSight Challenge!


 

 

Predicting Investment Trends: A Customer Story

Mellon Equity Associates Predicts Investment Trends
By Harry Grosse CFA, Vice President Quantitative Research, Mellon Equity Associates

Mellon Equity Associates had three challenges with respect to improving our ability to predict which broad asset class would be most successful - ultimately providing the greatest return on our assets under management.

The first challenge was to predict the spread between stocks and bonds. We wanted to track how the S&P 500 performed relative to the fixed income market, based on various market conditions. Our thesis was this: changes in certain macroeconomic variables would prove to correlate to changes in the performance in the two respective indices (stocks and bonds).

The second challenge was to perform the same sort of analysis with respect to small cap versus large cap stocks. That is, based on certain market conditions, which (small or large) would be the preferred investment? The third challenge was to perform a similar kind of analysis on value stocks against growth stocks.

Our core belief was that nonlinear modeling could help us identify which asset class would outperform in a given macroeconomic environment.

Read the rest of this article...

  Message from the CEO

This issue of Synapse is particularly exciting as we have a terrific case study from Mellon Equity Associates.

Just recently, I've had some wonderful experiences touring the Far East. My colleague Zhen Liu and I spent a week in China meeting with potential strategic partners to discuss how a Crime Forecasting System NeuralWare is developing with TruNorth Systems might be customized for the cities of Wuhan and Shanghai. We also met with representatives of ETV in the city of Changsha to discuss predictive analytics for a new television shopping channel. I then traveled to Japan where I presented the Crime Forecasting System concept in Tokyo and Osaka, and I joined our partner SET Software in making NeuralSight presentations to Matsushita and Mitsubishi Materials.

Back at home, we have undertaken a modeling project for a leading healthcare management organization, and we have started developing a new energy demand and price forecasting system based on NeuralSight. We are pleased that NeuralSight has become the foundation for so many internal projects, as well as the keystone for providing solutions to our customers. We're "eating our own dog food" and putting our money where our mouth is. We hope those of you who "take the NeuralSight challenge" (in this newsletter) will discover how NeuralSight can help you improve your model development process.

Yours truly,
Jack Copper, CEO


 

 
 
  • Tech Tips
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    Classification Models and "Strength" Values

    Neuralware's Predict classification models produce predicted outputs in the same format as the targets in your original data. For example, model outputs might be in the form of 0/1, yes/no, red/green/blue, class1/class2/class3/class4 or some other format. While that kind of output is certainly useful, it is often desirable to also know the strength of each predicted class assignment. Information can be gained, for example, by looking at two records that both predict "yes". One record might predict 0.60 as "yes" and another predict 0.99 as "yes"; it is important to know that you can have more confidence in the second data record.

    Predict allows you to control output options via the Predict menu. Simply choose Predict/Run, put a check mark in the check box Internal Units (Network output not converted), and continue the task by clicking the Run button. The predicted outputs will then include continuous values. For example, a four- class output, e.g., {red, orange, yellow, blue} would generate four values, e.g., {0.01, 0.42, 0.23, 0.34}, and the highest value would be chosen as the winning class. For this particular record, orange (0.42) would be the surviving predicted output.

      Read the rest of this tech tip...
     
  • Take the NeuralSight Challenge!
  •  
    Arm Wrestling

    We're throwing down the gauntlet! Send us your best model and the data you used to create it. Using NeuralSight, we will attempt to beat your results, proving NeuralSight's value. NeuralSight works like a team of 100 modelers staying up all night testing different neural network models and finding the best ones.

    We can only accept a limited number of challenges, and we'll have some specific requirements about the data you give us. If you would like take the NeuralSight challenge, simply send email to Bob Everly, and he'll set it up. Good luck!

       
     
  • Have Your Modeling Story Published in Synapse
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    If you would like to have your modeling story published in Synapse, please send an email to newsletter @neuralware.com with a brief note about your application.
     

     
  • The professional choice for predictive analytics
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    With all the different tools out there, there is a reason why Neuraware is the professional choice of 94% of the Fortune 500 and used in companies and universities all over the world. Call (412) 278-6292 or email John Wavle today to learn more about how we can help you with your predictive modeling initiatives.
     

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