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Monte-Carlo Simulation

  • How to simulate an area of a circle
  • Variance reduction techniques
    • authentic variable
    • momentum matching
    • control variate
    • importance sampling
      • $$E_{f(x)}[h(x)] = E_{g(x)}[\frac{h(x)f(x)}{g(x)}]$$
        • sample from g if hf/g has smaller variance than h(x)
    • Low-discrepancy Sequence

Probability Algo

Random Variables

  • x,y and x, z correlation 0.8, whats the max/min correlation for z, y?
    • cosine similarity
    • positive semi-definite property of correlationmatrix
  • generate correlated random variables
    • Cholesky decomposition $$x = \mu + R^T z$$
    • SVD decomposition $$x = \mu + UD^{\frac{1}{2}}z$$
  • generate random variables with distribution
    • normal distribution - use Central Limit Theorem
    • inverse transformation method
    • rejection method

Shuffle

  • How to shuffle n numbers with every sequence equal probability
    • by sorting + random number sequence : O(nlogn)
    • Knuth Shuffle: sample without putting back (each 1/n! probability)
  • read data in sequence, how to ensure each data has equal probability to be sampled
    • pick the first, change with 1/2 probability if there is a second ... pick n th and keep with probability n/(n+1), change with 1/(n+1)

Statistics

  • give Z-U(0,1) how to draw N(0,1) variable
  • give Z-N(0,1) how to draw multi-variate (N(mu, sigma)) variable

Numerical Methods

  • P.D.E
    • Implicit method, explicit method, Crank-Nickolson Method