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.
Read more: Artificial intelligence improves fine wine price prediction
The Latest on: Machine learning predictions
[google_news title=”” keyword=”machine learning predictions” num_posts=”10″ blurb_length=”0″ show_thumb=”left”]
via Google News
The Latest on: Machine learning predictions
- High-precision blood glucose level prediction achieved by few-molecule reservoir computingon April 26, 2024 at 9:24 am
A collaborative research team from NIMS and Tokyo University of Science has successfully developed an artificial intelligence (AI) device that executes brain-like information processing through ...
- 3 Machine Learning Stocks That Could Triple Your Money by 2030on April 26, 2024 at 3:58 am
InvestorPlace - Stock Market News, Stock Advice & Trading Tips Investing in machine learning (ML) stocks presents an enticing opportunity for ...
- How AI & Machine Learning Are Transforming Farms for Bountiful Harvestson April 25, 2024 at 10:33 pm
The use of Artificial Intelligence (AI) and Machine Learning (ML) for agriculture in India is vast and promising. With the aid of AI and ML algorithms, farmers can optimize crop yield prediction, ...
- Machine learning model predicts CIS to MS conversion risk: Studyon April 25, 2024 at 10:00 pm
A machine learning model can predict the risk of converting from clinically isolated syndrome (CIS) to multiple sclerosis (MS), per a study.
- Advancing medical treatment with causal machine learningon April 25, 2024 at 9:51 pm
Machines can learn not only to make predictions, but also to handle causal relationships. An international research team shows how this could make therapies safer, more efficient, and more ...
- NASCAR odds for Dover: Expert picks, predictions for Wurth 400 on Sunday 4/28on April 25, 2024 at 12:50 pm
N ASCAR heads to Dover Motor Speedway for the 11th points-paying race of the 2024 season: the Wurth 400 on Sunday (2 p.m. ET, FS1). Dover is a one-mile, steeply banked concrete track, which makes it a ...
- Machine learning system offers new hope for diagnosis of rare genetic disorderson April 25, 2024 at 11:30 am
The team developed a machine learning system called AI-MARRVEL (AIM ... Baylor Genetics clinical diagnostic laboratory noted that AIM's module can contribute to predictions independent of clinical ...
- Machine Learning Models: Improve Heart Disease Diagnosis in Womenon April 24, 2024 at 2:59 am
A study by scientists shows machine learning models improve prediction of heart disease in women and that sex-specific and patient-specific medicines are future of healthcare.
- Navy Invention Speeds Machine Learning Processon April 21, 2024 at 5:00 pm
The good news? Navy researchers developed an accelerated optimization method that reduces the number of iterations compared to standard gradient algorithms. This is ideal for machine learning because ...
- ChatGPT Stock Predictions: 10 Stocks That Have 10X Potentialon April 19, 2024 at 3:56 am
In this article, we will take a detailed look at ChatGPT Stock Predictions: 10 Stocks That Have 10X Potential. For a quick overview of such stocks, read our article ChatGPT Stock Predictions: 5 ...
via Bing News