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We introduce a pathwise approach to analyze the relative performance of an equity portfolio with respect to a benchmark market portfolio. In this energy-entropy framework, the relative performance is decomposed into three components: a…

Portfolio Management · Quantitative Finance 2016-01-05 Soumik Pal , Ting-Kam Leonard Wong

A new approach to provide a fruitful analysis of signal amplitude is proposed. It is this method that has made it possible to eliminate some observed artificial events from the list of candidates for decays of superheavy nuclei. Examples of…

Nuclear Experiment · Physics 2015-06-09 Y. S. Tsyganov

Resource adequacy studies typically use standard metrics such as Loss of Load Expectation and Expected Energy Unserved to quantify the risk of supply shortfalls. This paper critiques present approaches to adequacy assessment and capacity…

Applications · Statistics 2023-09-13 Chris J. Dent , Nestor Sanchez , Aditi Shevni , Jim Q. Smith , Amy L. Wilson , Xuewen Yu

We define an entropy based on a chosen governing probability distribution. If a certain kind of measurements follow such a distribution it also gives us a suitable scale to study it with. This scale will appear as a link function that is…

Data Analysis, Statistics and Probability · Physics 2007-10-24 Peter Sunehag

High-order phenomena play crucial roles in many systems of interest, but their analysis is often highly nontrivial. There is a rich literature providing a number of alternative information-theoretic quantities capturing high-order…

Information Theory · Computer Science 2024-10-15 Fernando E. Rosas , Aaron Gutknecht , Pedro A. M. Mediano , Michael Gastpar

We discuss the role of information entropy on the behaviour of random processes, and how this might take effect in the dynamics of financial market prices. We then go on to show how the Open Quantum Systems approach can be used as a more…

Mathematical Finance · Quantitative Finance 2024-07-01 Will Hicks

The thermodynamic definition of entropy can be extended to nonequilibrium systems based on its relation to information. To apply this definition in practice requires access to the physical system's microstates, which may be prohibitively…

Statistical Mechanics · Physics 2020-08-21 Gil Ariel , Haim Diamant

This paper introduces a new type of risk measures, namely regime switching entropic risk measures, and study their applicability through simulations. The state of the economy is incorporated into the entropic risk formulation by using a…

Risk Management · Quantitative Finance 2021-12-28 Babacar Seck , Robert J. Elliott

In mechanical design, there is often unavoidable uncertainty in estimates of design performance. Evaluation of design alternatives requires consideration of the impact of this uncertainty. Expert heuristics embody assumptions regarding the…

Artificial Intelligence · Computer Science 2013-03-26 Deborah L. Thurston , Yun Qi Tian

Inspired by holographic entanglement entropy, for geometries with non-zero abelian charges, we define a quantity which is sensitive to the background charges. One observes that there is a critical charge below that the system is mainly…

High Energy Physics - Theory · Physics 2013-10-31 Mohsen Alishahiha , Davood Allahbakhshi

We extend previously proposed measures of complexity, emergence, and self-organization to continuous distributions using differential entropy. This allows us to calculate the complexity of phenomena for which distributions are known. We…

Adaptation and Self-Organizing Systems · Physics 2016-04-01 Guillermo Santamaría-Bonfil , Nelson Fernández , Carlos Gershenson

We take another look at the general problem of selecting a preferred probability measure among those that comply with some given constraints. The dominant role that entropy maximization has obtained in this context is questioned by arguing…

Artificial Intelligence · Computer Science 2013-02-01 Manfred Jaeger

An axiomatic approach to macroeconomics based on the mathematical structure of thermodynamics is presented. It deduces relations between aggregate properties of an economy, concerning quantities and flows of goods and money, prices and the…

General Economics · Economics 2025-06-18 N. J. Chater , R. S. MacKay

Accurate prediction of remaining useful life under creep conditions is essential for the structural reliability of high-temperature components in critical engineering systems. Traditional approaches based on deterministic parametric models…

Computational Engineering, Finance, and Science · Computer Science 2026-05-08 Victor Maudonet , Carlos Frederico Trotta Matt , Americo Cunha

The longevity and viability of construction components in a circular economy demand a robust, data-informed framework for reuse decision-making. This paper introduces a multi-level grading and classification system that combines Bayesian…

General Economics · Economics 2025-04-10 Yiping Meng , Sergio Cavalaro , Mohamed Osmani

Different aspects of critical behaviour of magnetic materials are presented and discussed. The scaling ideas are shown to arise in the context of purely magnetic properties as well as in that of thermal properties as demonstrated by…

Strongly Correlated Electrons · Physics 2013-12-04 R. Pelka , P. Konieczny , M. Fitta , M. Czapla , P. M. Zielinski , M. Balanda , T. Wasiutynski , Y. Miyazaki , A. Inaba , D. Pinkowicz , B. Sieklucka

Calibration methods have been widely studied in survey sampling over the last decades. Viewing calibration as an inverse problem, we extend the calibration technique by using a maximum entropy method. Finding the optimal weights is achieved…

Methodology · Statistics 2009-09-23 Fabrice Gamboa , Jean-Michel Loubes , Paul Rochet

The rate of entropy production by a stochastic process quantifies how far it is from thermodynamic equilibrium. Equivalently, entropy production captures the degree to which detailed balance and time-reversal symmetry are broken. Despite…

Statistical Mechanics · Physics 2020-12-02 Luca Cocconi , Rosalba Garcia-Millan , Zigan Zhen , Bianca Buturca , Gunnar Pruessner

The physical foundations of a variety of emerging technologies --- ranging from the applications of quantum entanglement in quantum information to the applications of nonequilibrium bulk and interface phenomena in microfluidics, biology,…

Quantum Physics · Physics 2014-03-25 Gian Paolo Beretta , Enzo Zanchini

Risk management often plays an important role in decision making under uncertainty. In quantitative risk management, assessing and optimizing risk metrics requires efficient computing techniques and reliable theoretical guarantees. In this…

Optimization and Control · Mathematics 2026-01-01 Zhaolin Hu