Computing Fermi Expectation For Decisions On Risk Or Gain Scores

Statistical Insights Guiding Decisions …

We can create a time-based statistical expectations plot for risk or gain scores. The calculation is based on a Fermi-estimation, and we extend it further by having it adaptive time-based and calculating statistical expectations.

The scoring can be a relative grading where we may adjust the scores based on the intel updates from the field if the risk has increased or decreased. The grading may also be changed based on how we may be related to the changing situational environment and climate, as well as our own situational requirements to meet the challenges.

calculate_expectation() takes 3 lists as input parameters: score, frequency, and total_frequency. It calculates the expectation for each element in the score list based on its corresponding frequency and the total sum of scores. The function returns a list of calculated expectations.

The illustration depicts an example of time-based data for 3 events (A, C, and T). Please replace this example data with actual time-based data, i.e. frequency of occurrences of events (or factors), risk scores of events (or factors). The window of the time can be adjusted based on days or weeks to focus on the most recent epoch.

Statistical Expectation is used: