It’s not a special case. This sort of scenario will always happen during burn periods due to the way the neutralization function is set up.
wigglemuse is technically rewarded with mmc. When I was mentioning rewards etc, I was 100% referring to numerai’s rewards for originality. From my point of view, corr is not a reward per-se as that is simply raw performance on the target for which anybody can earn a decent number with the example_predictions. MMC on the other hand is numerai’s incentive to be original. To deviate as much as possible from the example predictions (and meta model).
From a payout perspective sure it’s less important, but I’m seeing this as a problem for numerai’s plan of rewarding originality.
I certainly do no want for MMC to converge towards CORR.
I am merely stating the fact that MMC “fails” as an incentive to be original when the meta model is negative. As stated before, a simple, basic explanation of the neutralization is that it “removes” the meta model. However, what happens when you remove a negative stock market corr feature from a model that had a positive exposure to that feature?
I am also 100% ok with MMC to be negative even with positive CORR and vice-versa, but only when it should.
E.g. positive corr but highly correlated with example predictions and maybe corr is even less than the example predictions corr -> negative MMC.
Or negative corr, but low correlation to example predictions and maybe even beating the example predictions -> positive MMC.
However, as your models proved, you can have positive CORR, negative exposure to the meta model, significantly outperforming the example predictions (and meta model too probably) and have negative MMC. This I can’t really see as an acceptable scenario…
And the problem is only on the rounds with negative meta model, otherwise I believe MMC is really well constructed. On positive rounds, it removes the meta model performance (proportionately to the user’s exposure) and computes the corr again (with covariance), very elegant and straightforward…
It would only need a bit of a fix for negative rounds…