Thursday, January 8, 2015

Data analytics - then and now

I came across this article on Yahoo! Finance about how the S&P 500 index will perform in 2015.

Here's What Happened Those Other Times The S&P 500 Started The Year With 3 Down Days

I could not but avoid drawing a parallel between this analysis based on data trends with what astrologers do to predict a person's future.

Astrologers use a variety of means - some use a person's birth date and map that against the changing planetary positions to predict the person's future; some look at the lines on a person's palm and extrapolate to make the predictions; and there could be an enterprising astrologer who uses the planetary positions and then correlates that with the brand of the dog food the person's dog eats to make the prediction. All based on a data trend.

In the case of making a prediction about the performance of S&P 500 index in 2015, it is based on how the index has performed historically during the first 3 days of an year.  Here's where the dog food comes in - release of a Star Trek movie.  During one of those those years in the past when the S&P 500 index fell for the first 3 days in a year and the index ended up in the negative by the end of the year, there was a Star Trek movie release.

Data analytics, as an offshoot of Statistics, is considered a science (check the Wikipedia page) and has proven itself fairly well in several realms - consumer behavior, traffic predictions, brand adoption and even clinical trials etc.

So, should we call astrology as science and put it up on a pedestal as the oldest use of data analytics - only without the help of massive computational power?

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