The price fluctuation of fine wines can now be predicted more accurately using a novel artificial intelligence approach developed by researchers at UCL. The method could be used to help fine wine investors make more informed decisions about their portfolios and encourage non-wine investors to start looking at wine in this manner and hence increase the net trade of wine. It is expected that similar techniques will be used in other ‘alternative assets’ such as classic cars.
We’re pleased we were able to develop models applicable to fine wines and we hope our findings give the industry confidence to start adopting machine learning methods as a tool for investment decisions.
Michelle Yeo, UCL MSc graduate
Co-author, Dr Tristan Fletcher, an academic at UCL and founder of quantitative wine asset management firm Invinio, said: “People have been investing in wine for hundreds of years and it’s only very recently that the way they are doing it has changed. Wine investment is becoming more accessible and is a continually growing market, primarily brokered in London: the world-centre of the wine trade. We’ve shown that price prediction algorithms akin to those routinely used by other markets can be applied to wines.”
The study, published today in the Journal of Wine Economics with guidance from Invinio, found more complex machine learning methods outperformed other simpler processes commonly used for financial predictions. When applied to 100 of the most sought-after fine wines from the Liv-ex 100 wine index, the new approach predicted prices with greater accuracy than other more traditional methods by learning which information was important amongst the data.
Co-author, Professor John Shawe-Taylor, co-Director of the UCL Centre for Computational Statistics & Machine Learning and Head of UCL Computer Science, said: “Machine learning involves developing algorithms that automatically learn from new data without human intervention. We’ve created intelligent software that searches the data for useful information which is then extracted and used, in this case for predicting the values of wines. Since we first started working on machine learning at UCL, our methods have been used in a wide variety of industries, particularly medical and financial, but this is the first time we have entered the world of fine wine.”
For this study, the team tested two forms of machine learning including ‘Gaussian process regression’ and the more complex ‘multi-task feature learning’, which was first invented by UCL scientists in 2006 but has had significant enhancements recently. These methods are able to extract the most relevant information from a variety of sources, as opposed to their more standard counterparts, which typically assume every data point is of interest, spurious or otherwise.
Analysis shows that machine learning methods based on Gaussian process regression can be applied to all the wines in the Liv-ex 100 with an improvement in average predictive accuracy of 15% relative to the most effective of the traditional methods. Machine learning methods based on multi-task feature learning only worked for half of the wines analysed as it required a stronger relationship between prices from one day to the next.
However, where multi-task feature learning was applied, accuracy of predictions increased by 98% relative to more standard benchmarks.
The Latest on: Machine learning predictions
via Google News
The Latest on: Machine learning predictions
- Northwestern Wildcats Preview 2022: Season Prediction, Breakdown, Key Games, Playerson July 31, 2022 at 10:30 pm
Previewing, predicting, and looking ahead to the Northwestern season with what you need to know and keys to the season. - Contact/Follow @ColFootballNews & @PeteFiutak ...
- Mariners vs. Astros prediction, betting odds for MLB on Saturdayon July 30, 2022 at 8:30 am
The Houston Astros lock horns with the Seattle Mariners in MLB on Saturday. This preview is based on 10K simulations of the game.
- On3 Recruiting Prediction Machine: New team leads for No. 1 RB Richard Youngon July 29, 2022 at 10:16 am
The On3 Recruiting Prediction Machine has Oregon as the top team in Young’s recruitment with a 42.6% chance of landing the nation’s top running back. The Ducks overtake Alabama, the previous leader.
- On3 Recruiting Prediction Machine: Brock Glenn is one day away from commitmenton July 29, 2022 at 7:08 am
The On3 engineering group teamed up with Spiny.ai to create the industry’s first algorithm and machine learning-based product to pred ...
- DeepMind AI Breakthrough Allows Prediction of More Than 200 Million Protein Structureson July 29, 2022 at 5:00 am
DeepMind has announced that has generated structures for all 200+ million proteins in the centralized UniProt database. This is a big deal for basic biological research as well as for efforts to ...
- AI tackles the challenge of materials structure predictionon July 28, 2022 at 7:05 am
Researchers have designed a machine learning method that can predict the structure of new materials with five times the efficiency of the current standard, removing a key roadblock in developing ...
- Study draws new link between dopamine-based reward learning and machine learningon July 27, 2022 at 6:40 am
Past neuroscience and psychology research has repeatedly demonstrated the crucial role of rewards in how humans and other animals acquire behaviors that promote their survival. Dopaminergic neurons, ...
- Could machine learning fuel a reproducibility crisis in science?on July 26, 2022 at 6:28 am
Machine learning is being sold as a tool that researchers can learn in a few hours and use by themselves — and many follow that advice, says Sayash Kapoor, a machine-learning re ...
- How a Philadelphia startup is using AI and machine learning to better predict clinical trial success rateson July 24, 2022 at 8:56 am
A chance meeting at a bowling alley three summers ago laid the groundwork for what has evolved into a health care fintech startup led by three Wharton MBA alum.
- Aalto University: Machine learning gives material science researchers a peek at the answer keyon July 23, 2022 at 11:42 pm
Carbon-based materials hold enormous potential for building a sustainable future, but material scientists need tools to properly analyse their atomic structure, which determines their functional ...
via Bing News