I am the only one who practices magic: I practice magic in the city

Chapter 167 The Importance of Personality (Second update 4000 words)
"The prediction accuracy of the strong factor model based on machine learning bias correction is significantly higher than that of the single strong factor model."

"In particular, the PITH algorithm performed best in terms of bias correction. Compared with the uncorrected strong factor model, the PITH-corrected model reduced the root mean square error (RMSE), mean absolute error (MAE), and mean absolute percentage error (MAPE) by 77.93%, 88%, and 88.77%, respectively."

Tong Yongshan looked at the last line of experimental conclusions as if he was looking at a peerless beauty without clothes.

If the prediction fit just now still has accidental factors, then the bias correction conclusion in the final experimental report fully demonstrates the effectiveness of this experiment!
In fact, most of the models in the financial field are not used to predict specific stock index information and stock prices.

Some models are used for risk assessment, some are used for macroeconomic analysis, and some are used for time series volatility analysis.

But since the day econometrics was born, countless econometricians who were originally mathematicians have fantasized that they could truly predict stock index fluctuations and stock prices.

In fact, they are also moving step by step in this direction.

From the Black-Scholes model for option pricing to the APT model used to price arbitrage; from VAR for risk management to LMM for managing interest rate derivatives.

Econometricians are relentlessly expanding the world's financial risks, bringing the world into financial crisis time and time again.

All of this comes from their desire for accurate predictions.

But this is easier said than done.

Whether predicting stock indices or financial derivatives, it is not just a blind prediction based on past trends. If that were the case, econometricians would be no different from gamblers who record lottery numbers in the hope of summarizing numerical patterns.

A prediction model is essentially a combination of multiple models, which is more in line with the definition of a large model. It is a model for multiple different purposes. After summary training, it is an inference generated based on real data conditions in a big data environment, rather than a simple summary of rules.

In simple terms, it means creating a virtual real market and then spontaneously evolving future trends based on the real data in the training data.

But to this day, there is no model that can truly predict the price changes of any financial product relatively accurately.

Because there are too many variables and the amount of calculation is too large, this was almost an impossible task before the birth of artificial intelligence.

Prior to this, in the field of traditional econometrics, the ARIMA model and the GARCH model in the time series model had the highest prediction accuracy. Both models were proposed more than 30 years ago.

Robert Engle and Clive Granger, who proposed the GARCH precursor model ARCH, also won the 3049 Nobel Prize in Economics.

Even so, the GARCH model's prediction accuracy of volatility does not exceed 50%.

In the field of machine learning, some scholars and talented Wall Street analysts are also using long short-term memory neural network architectures to predict the prices of financial products, but the prediction accuracy is even less than expected.

Now, with the combination of strong factor models and neural network algorithms, the deviation rate has been reduced so much. The low deviation rate shows that the improvement in prediction accuracy is not a coincidence!

Great success!
By the way, what is this PITH algorithm?
Facing Tong Yongshan's question, Fang Yu said calmly: "This is a deep learning algorithm model developed by Youzi Technology. I tested several different algorithms, and finally PITH's bias correction effect was the best. The report is attached with the bias correction effects of several different algorithms."

"I need to study this report carefully again. Xiaoyu, you prepare it. The group will do a complete review tomorrow. In addition, the article can also be prepared. As long as we verify the correctness of the experimental results, we can submit it." Tong Yongshan suppressed his excitement, turned on his computer, connected to the server of Youzi Technology, and began to download all the information of this experiment from it.

Fang Yu nodded: "Teacher, in fact, I have almost finished writing the paper during the experiment. It will probably take two or three days to complete it by adding the results and arguments. Where do you think I should submit this article?"

Tong Yongshan looked at Fang Yu with approval. This student is such a worry-free person!

In all these years, I have never taught such a worry-free student!

Has it been a month since the project was launched? It seems to be only about 20 days?
I have actually completed the first phase of the content!

And the results far exceeded my expectations for the first stage!
Tong Yongshan said without hesitation: "Of course it is ECTA (Chinese Journal of Econometrics)!"

Jiang Nanzhen didn't know when she had gone to the bathroom and finished her work. She returned to Tong Yongshan's office and listened to most of the conversation between the teacher and the student.

Have you finished writing your paper?

No way?
Jiang Nanzhen subconsciously covered her mouth and looked at Fang Yu in surprise.

Although her academic ability is relatively poor, she is a graduate student after all, and she still has basic academic qualities and vision.

Although this topic basically does not belong to the traditional field of econometrics, it is closer to computer science.

However, it is not an easy task for most econometrics scholars to improve the strong factor model in the econometrics part so that it can be suitable for big data analysis.

It is something that may not be accomplished even after eight group meetings for intensive discussion, but this junior undergraduate who is just a sophomore actually completed it by himself?
And you have to invest in ETCA! ?
Those are the top five magazines!
If you can get one of your papers published in the top SSCI journals, it will be enough to get you a teaching position in the economics department of any top university in the country!

And from what Tong Yongshan said, it seems that as long as this article is finished, it will definitely be accepted?

Is it that powerful?

Jiang Nanzhen looked at Fang Yu's computer with envy. If he could give me a joint first author title for this article, no, at least I could be the second author.

Or maybe just steal his paper and publish it first?

The thought only flashed through my mind, and I knew it was impossible.

By then, not to mention that I won’t be able to produce the various meetings and reports afterwards, as long as Tong Yongshan comes out to testify against me, this matter will not be accomplished.

I am not even a small fry in the academic world now. If I am accused of academic misconduct, I won’t be able to return to the financial circle.

Moreover, my purpose is not to pursue academic goals, but to climb up the career ladder through being an academic!
Huh?and many more!

A flash of light flashed through Jiang Nanzhen's mind.

Confused!
Why do I only focus my attention on Tong Yongshan?
It seems that this junior fellow has greater potential in the academic world in the future than Tong Yongshan, an old man who is already over fifty years old?
The only problem is that this junior brother seems difficult to deal with.

Moreover, they are too young. If they can't find a partner to marry, just getting together doesn't seem to bring much benefit other than having some fun.

Need to think about it carefully.

However, this junior fellow seems to be very capable. Do you want to give it a try?

Jiang Nanzhen's foxy eyes moved around Fang Yu.

It sounds like a long story, but these are just the thoughts that flashed through Jiang Nanzhen's mind in an instant.

Before she could figure out what to do next, she heard Fang Yu continue, "You are a member of the Econometric Society and a reviewer for ETCA. You have a better chance of getting accepted by ETCA."

"But I have to tell you in advance that I must be the first author. In addition, there is also a co-first author at Yuzi Technology, so I can only give you the corresponding author. Is that okay with you?"

Jiang Nanzhen was a little surprised. In her opinion, the student was so bold and direct in asking his supervisor to author his paper.

What made her feel even more strange was that Fang Yu's words were quite harsh, but they didn't sound that harsh?
How did he do that? (Not magic)
Sure enough, after hearing Fang Yu's words, Tong Yongshan did not feel any dissatisfaction towards Fang Yu, and showed a helpless expression: "You kid, how can I still care about your thesis?"

"Didn't we already sign the agreement for the first author qualification at Yuzu Technology? Now that the results are available, I can't break the contract as an expert like you, right? What is there to worry about?"

“You can designate the second author of this article yourself, not the first author. It belongs to whoever it is. There are not so many things in my group.”

Fang Yu grinned: "I know that you are highly respected, upright, honest, noble, elegant, and self-disciplined..."

Tong Yongshan was annoyed: "Stop, stop, why are you talking about keeping yourself clean? Stop flattering me, go back and sort out the experimental data, supplement the paper, and finish the review as soon as possible. If you can't finish it by the end of the month, I can still put you in the queue. If you can't finish it next week, you will have to wait another two months."

Haha, I’m reminding you to keep yourself clean, but don’t lose your integrity in your later years and let down your master’s wife.

It has to be said that Fang Yu actually projected some of his emotions for his mother onto Mrs. Zhao, otherwise he wouldn't care whether Tong Yongshan cheated on his wife or not.

Fang Yu chuckled: "Don't worry, I'll leave first."

Tong Yongshan waved his hand: "Let's go, let's go quickly, I get angry when I see you."

Just as he finished speaking, Tong Yongshan remembered something and called Fang Yu over: "Remember to use LaTeX for your paper, not Word, okay?"

Fang Yu waved his hands impatiently: "I know, I know, the templates have all been downloaded."

Tong Yongshan did not take it as an offense. He just laughed and scolded, and was as happy as Maitreya Buddha.

As soon as he went out, Fang Yu saw Jiang Nanzhen following him out.

"Junior brother!" Jiang Nanzhen took two quick steps in her high heels and caught up with Fang Yu, her voice a little breathless.

Fang Yu stopped and said, "Sister, what's the matter?"

"The teacher is so good to you. I was scared when you told the teacher about signing the paper just now, but the teacher was not angry. You are so amazing! How did you do it? Can you teach me, teacher sister?" Jiang Nanzhen looked up at Fang Yu, seemingly with eyes full of admiration.

"How did you do that?" Fang Yu thought for a moment. "It's very simple. Just write a paper that can be published in a top SSCI journal, and then show it to him. You can just submit it directly."

Jiang Nanzhen's face froze. She knew very well that Fang Yu was just trying to get her to accept her offer.

Fang Yu was indeed trying to appease Jiang Nanzhen. If it wasn't him, but Cheng Feng, even if the article was written by Cheng Feng and the experiment was done by Cheng Feng independently. If Cheng Feng made this request to Tong Yongshan in person, even if Tong Yongshan agreed to Cheng Feng's request out of respect, he would still be unhappy.

In daily life, we often encounter such a situation.

If two people who have made the same contribution, hold the same position, and are the same in all other aspects make the same request, when A says this, people will feel that it is natural; when B makes the same request, people will feel that it is outrageous and unreasonable.

Why is there such a difference?

This is because these two people have established different personalities in the eyes of others from the very beginning.

From the beginning, Fang Yu presented himself to others as a person who had his own opinions, spoke his mind, and would take revenge. Once others accepted this kind of personality, they would have a higher tolerance for what he said.

If Fang Yu, from the beginning, showed in front of others that he was used to giving up the dominant power to others and letting others have the final say in everything, then even if he played a leading or even decisive role in a matter, when he made requests to others, others would still feel uncomfortable.

Because he raised the threshold of acceptance of people around him too high.

The early stage when people enter a new social environment is the best stage to establish a new personality in this new social environment.

At this stage, even if you show a strong sense of self-awareness, even if you go a little too far, most people will not cut off contact with you or blindly make enemies. The logic of normal people is to observe and see.

To put it bluntly, it means making others adapt to your excesses.

Once you adapt imperceptibly, you will gain the greatest freedom and social privileges in this new social environment.

Even if a person has a cowardly character, as long as he realizes this and deliberately changes himself when entering a new environment, he can successfully create a tough image in the new environment. Even if it is just a mask, but when the mask is worn too many times and sticks to his face, he will really become tough.

Jiang Nanzhen was feeling lucky, and tried to keep her face elegant. "Then I can't learn it. There's nothing I can do. I'm too stupid. By the way, Junior Brother, I'll treat you to dinner to celebrate your academic success."

Fang Yu looked Jiang Nanzhen up and down with a very direct gaze.

"Haha, there's nothing to do tonight, but if you have anything to say, just speak up. We're all from the same school, so there's nothing we can't say."

Jiang Nanzhen's hair stood on end when Fang Yu looked at her. She felt as if she was being scanned naked by a laser.

"Um, Junior Brother, um..." Jiang Nanzhen hesitated, feeling a little embarrassed, "Can you put my name on this paper as well?"

Fang Yu grinned: "Senior sister, do you want a second work?"

Jiang Nanzhen lowered her head: "You know, I don't have much talent. The teacher just said that you can designate the second author. If there are enough places, can you add me in?"

This chapter is a must-read for students and recent graduates entering new work units.

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(End of this chapter)