What is derivatives data?

Derivatives data includes details about the prices, volumes, and trading activities of these instruments, providing insights into market trends, investor sentiment, and risk management. It is used by traders, investors, and financial institutions to make informed decisions and assess the overall market conditions.

What is derived data?

As you've learned, derived data is created by transforming existing data points to create new insights. For example, combining population data with geographic data to create population density data is considered derived data. Derived data can be extracted from any of the other three types of data – but should not be derived from other derived data.

How do data scientists use derivatives?

By taking the derivative of a mathematical function, data scientists can determine the slope or rate of change. This information is utilized in gradient-based optimization algorithms like gradient descent, which iteratively adjust model parameters to minimize errors and maximize performance.