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We investigate entropy as a financial risk measure. Entropy explains the equity premium of securities and portfolios in a simpler way and, at the same time, with higher explanatory power than the beta parameter of the capital asset pricing…

Pricing of Securities · Quantitative Finance 2015-01-07 Mihaly Ormos , David Zibriczky

We show that the way in which the Shannon entropy of sequences produced by an information source converges to the source's entropy rate can be used to monitor how an intelligent agent builds and effectively uses a predictive model of its…

Adaptation and Self-Organizing Systems · Physics 2007-05-23 James P. Crutchfield , David P. Feldman

Learning algorithms need bias to generalize and perform better than random guessing. We examine the flexibility (expressivity) of biased algorithms. An expressive algorithm can adapt to changing training data, altering its outcome based on…

Machine Learning · Statistics 2019-11-13 Julius Lauw , Dominique Macias , Akshay Trikha , Julia Vendemiatti , George D. Montanez

Entropic uncertainty relations place nontrivial lower bounds to the sum of Shannon information entropies for noncommuting observables. Here we obtain a novel lower bound on the entropy sum for general pairs of observables in…

Quantum Physics · Physics 2009-11-13 Julio I. de Vicente , Jorge Sánchez-Ruiz

Shannon's metric of "Entropy" of information is a foundational concept of information theory. This article is a primer for novices that presents an intuitive way of understanding, remembering, and/or reconstructing Shannon's Entropy metric…

Information Theory · Computer Science 2014-05-09 Sriram Vajapeyam

The concept of entropy, firstly introduced in information theory, rapidly became popular in many applied sciences via Shannon's formula to measure the degree of heterogeneity among observations. A rather recent research field aims at…

Methodology · Statistics 2017-03-20 Linda Altieri , Daniela Cocchi , Giulia Roli

This paper derives bounds for two omnipresent information theoretic measures, the Shannon entropy and its complementary dual, the extropy. Based on a large size data set from a logconcave model, the said bounds are obtained for the entropy…

Statistics Theory · Mathematics 2025-07-21 Konstantinos Zografos

We present a numerical study of the application of the Shannon entropy technique to the planar restricted three-body problem in the vicinity of first-order interior mean-motion resonances with the perturber. We estimate the diffusion…

Chaotic Dynamics · Physics 2020-01-08 C. Beaugé , P. M. Cincotta

The Dirichlet prior is widely used in estimating discrete distributions and functionals of discrete distributions. In terms of Shannon entropy estimation, one approach is to plug-in the Dirichlet prior smoothed distribution into the entropy…

Information Theory · Computer Science 2017-09-20 Yanjun Han , Jiantao Jiao , Tsachy Weissman

We deploy Shannon's information entropy to the distribution of branching fractions in a particle decay. This serves to quantify how important a given new reported decay channel is, from the point of view of the information that it adds to…

In this paper, we develop a general theory of truncated inverse binomial sampling. In this theory, the fixed-size sampling and inverse binomial sampling are accommodated as special cases. In particular, the classical Chernoff-Hoeffding…

Statistics Theory · Mathematics 2019-08-20 Xinjia Chen

Conformal prediction (CP) provides a comprehensive framework to produce statistically rigorous uncertainty sets for black-box machine learning models. To further improve the efficiency of CP, conformal correction is proposed to fine-tune or…

Machine Learning · Computer Science 2025-12-03 Senrong Xu , Tianyu Wang , Zenan Li , Yuan Yao , Taolue Chen , Feng Xu , Xiaoxing Ma

The problem of estimation error of Expected Shortfall is analyzed, with a view of its introduction as a global regulatory risk measure.

Risk Management · Quantitative Finance 2014-02-25 Imre Kondor

Predictive inference requires balancing statistical accuracy against informational complexity, yet the choice of complexity measure is usually imposed rather than derived. We treat econometric objects as predictive rules, mappings from…

Statistics Theory · Mathematics 2026-02-16 Nicholas G. Polson , Daniel Zantedeschi

In the present paper we prove a family of tight upper and lower bounds for the Shannon entropy and von Neumann entropy based on the p-norms. This allows us to have an entropy estimate, a criterion for the finiteness of it and a bound on the…

Information Theory · Computer Science 2024-08-22 Juan Pablo Lopez

Entropy notions for $\varepsilon$-incremental practical stability and incremental stability of deterministic nonlinear systems under disturbances are introduced. The entropy notions are constructed via a set of points in state space which…

Optimization and Control · Mathematics 2022-09-13 Michelle S. Chong

Bayesian optimization (BO) is a popular method for efficiently inferring optima of an expensive black-box function via a sequence of queries. Existing information-theoretic BO procedures aim to make queries that most reduce the uncertainty…

Machine Learning · Statistics 2022-10-05 Willie Neiswanger , Lantao Yu , Shengjia Zhao , Chenlin Meng , Stefano Ermon

We evaluate Shannon entropy for the position and momentum eigenstates of some conditionally exactly solvable potentials which are isospectral to harmonic oscillator and whose solutions are given in terms of exceptional orthogonal…

Mathematical Physics · Physics 2015-05-27 D. Dutta , P. Roy

Information flow analysis is a powerful technique for reasoning about the sensitive information exposed by a program during its execution. While past work has proposed information theoretic metrics (e.g., Shannon entropy, min-entropy,…

Cryptography and Security · Computer Science 2010-09-22 Ji Zhu , Mudhakar Srivatsa

Entropy regularization is known to improve exploration in sequential decision-making problems. We show that this same mechanism can also lead to nearly unbiased and lower-variance estimates of the mean reward in the optimize-and-estimate…

Machine Learning · Computer Science 2022-08-26 Ben Chugg , Peter Henderson , Jacob Goldin , Daniel E. Ho