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
- Real-Time Machine Learning: Why It’s Vital and How to Do Iton June 19, 2021 at 7:47 am
By: Eric Siegel, Predictive Analytics World This article is sponsored by IBM. SUMMARY: Organizations often miss the greatest opportunities that machine learning has to offer because tapping them ...
- How machine learning helps improve your powers of predictionon June 16, 2021 at 8:14 pm
Machine learning models that analyze enormous amounts of data with seemingly impossible speed and scale enable organizations to make a broad variety of predictions, ranging from when someone might ...
- Experts Weigh In: Pros and Cons of Machine Learning for AI Securityon June 16, 2021 at 1:00 pm
AI security experts at RSA 2021 explore how attackers and defenders both can benefit from machine learning. See how it can both help and hurt.
- ProtoTree: Addressing the black-box nature of deep learning modelson June 16, 2021 at 6:13 am
One of the biggest obstacles in the adoption of Artificial Intelligence is that it cannot explain what a prediction is based on. These machine-learning systems are so-called black boxes when the ...
- Machine learning can reduce worry about nanoparticles in foodon June 16, 2021 at 5:11 am
Scientists can predict whether metallic nanoparticles in soil are likely to be absorbed by plants, which could cause toxicity.
- Data Insights and Machine Learning Take Charge of the Maritime Sales Processon June 15, 2021 at 11:19 pm
While the maritime industry has been hesitant engaging in use of data insight and machine learning, the table is now about to turn. Today, an increasing number of maritime companies actively use data ...
- Machine Learning Prediction of Parkinson's Disease Onset and Subtype Using Germline Variantson June 14, 2021 at 3:11 am
Parkinson's Disease is the second most common neurodegenerative disorder in the United States, and is characterized by a largely irreversible worsening of motor and non-motor symptoms as the disease ...
- CodeCrew Students Participate in Machine Learning and Data Science Bootcamp Hosted by WorldQuant Predictiveon June 10, 2021 at 5:17 am
The Bootcamp covers an introduction to data science and machine learning, as well as provides training on statistical calculations. Over the course of the program, students will gain critical skills, ...
- MIT Researchers Leverage Machine Learning for Better Lidaron June 7, 2021 at 3:48 pm
Lidar (short for light detection and ranging) is an increasingly common technology – it’s embedded in iPhones and Teslas – that uses lasers to measure ...
- Google Cloud Announces Managed Machine Learning Platform Vertex AIon June 6, 2021 at 12:11 am
At the recent Google I/O 2021 conference, the cloud provider announced the general availability of Vertex AI, a managed machine learning platform designed to accelerate the deployment and maintenance ...
via Bing News