Machine Learning Methods and Prediction

Free GARP FRM Part I lesson in Quantitative Analysis. 17 min read, ~2,597 words.

Train / validation / test split is the disciplinary frame: train fits parameters, validation tunes hyperparameters, test reports honest out-of-sample performance, and you touch test only once. Overfitting is the central enemy. Regularization (ridge L2, LASSO L1), cross-validation, and holdout sets are the defenses. PCA reduces dimensionality by finding orthogonal...

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