Week 9: Multiclass LR (intuitive? version)

Johnny Y -

This week, I continued working on the multiclass LR algorithm for the SentBERT + ARIMA data. It has come to my attention that a more intuitive explanation of LR might be best (thanks Makeen). Here goes:

The AI is confronted with the task of making a yes/no prediction based on several bits of information. It doesn’t know how much weight to give each bit of information yet, so it weighs them all equally to start. It then computes a score for the prediction (think of it like how confident the AI is that the answer is yes). If the score is above 0.5 (more likely than not), then the AI predicts yes; otherwise, it predicts no. For each data sample, the AI makes a prediction. If the AI’s prediction is correct, it assumes its weights are solid and doesn’t change them. If not, the AI adjusts them by an amount proportional to its confidence – if it thought that the probability of the answer being yes was either really high or really low, then it will adjust the weights more.

For multiclass LR, because there’s no clear threshold for the score (up/no-change/down isn’t necessarily >0.67/>0.33/>0), the AI simply computes a score for each choice. In this case, the AI would compute a score for up, a score for no-change, and a score for down. The AI then uses a formula to convert the scores to probabilities that sum to 1, and picks the choice with the highest associated probability. Again, if the prediction is correct, the AI assumes the weights are solid and doesn’t change them. If not, the AI will adjust them by an amount proportional to its confidence.

Hope this helps!

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    Anonymous
    The intuitive explanation really helps! Is there a specific certainty you are aiming for?
    Tesla Lukow
    The last comment was by me by the way, I got logged out.
    makeen_s
    Hi Johnny! I'm glad my perspective could be of help haha. Just to clarify, the AI makes its decision based on a wide variety of data sources, but after each incorrect prediction how does it decide how to change the weighting of each data source?
    johnny_y
    Thank you for your question, Tesla! I'm hoping to achieve an accuracy significantly above that of ARIMA alone (ideally 5+% higher).
    johnny_y
    Thank you for your question, Makeen! Without getting into too much detail, it adjusts the weights in the direction that brings error closer to the minimum (as determined through calculus: the partial derivative of the loss/error function should get closer to zero). The magnitude of this adjustment is proportional to how confident the AI was in its guess.

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