Classification in investing
Classification is used constantly in investing, whether through machine learning or the good old-fashioned human way. We're continually sorting investments into buckets and labeling them in ways that make them useful for us, like describing one stock as a real estate investment trust (REIT) and another as consumer goods.
By allowing an algorithm to do these jobs, we can more quickly and accurately sort data that can then be fed into other algorithms that do other jobs, like taking that data and looking for patterns that might predict the next dip in a particular stock's value.
We can also take classification and use it to help scrutinize bigger problems, like examining economic indicators that further drive and influence markets. Classification may not sound very helpful, but without it, all we have is a lot of data that's difficult to sort through and many missed opportunities.