The below article is an excellent read on the difference between stochastic forecasting and deterministic forecasting.
https://blog.ev.uk/stochastic-vs-deterministic-models-understand-the-pros-and-cons
Snippets from the article:
"A Deterministic Model allows you to calculate a future event exactly, without the involvement of randomness. If something is deterministic, you have all of the data necessary to predict (determine) the outcome with certainty.
Most financial planners will be accustomed to using some form of cash flow modelling tool powered by a deterministic model to project future investment returns. Typically, this is due to their simplicity. But this is fundamentally flawed when making financial planning decisions because they are unable to consider ongoing variables that will affect the plan over time.
Stochastic models possess some inherent randomness - the same set of parameter values and initial conditions will lead to an ensemble of different outputs. A stochastic model will not produce one determined outcome, but a range of possible outcomes, this is particularly useful when helping a customer plan for their future.
By running thousands of calculations, using many different estimates of future economic conditions, stochastic models predict a range of possible future investment results showing the potential upside and downsides of each."
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