Setting boundaries for neural networks
Risk.net Quants unveil new technique for controlling extrapolation by neural networks According to a popular internet meme, there are two types of people in this world: those who can extrapolate from incomplete data. Neural networks will probably struggle with that one. As quants race to deploy neural networks in finance, they are running into a common problem. Neural networks require huge datasets to train, but they do not always extrapolate well when faced with new situations. “Neural networks can fit the data very well within the region of training, but can produce completely unpredic...
Source: risk.net