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Unit-2 DA

Data Analytics (Dr. A.P.J. Abdul Kalam Technical University)

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UNIT-2
# Regression modelling
A regression model provides a function that describes the
relationship between one or more independent variables and
a response, dependent, or target variable.
For example, the relationship between height and weight may be
described by a linear regression model. A regression analysis is the basis
for many types of prediction and for determining the effects on target
variables. When you hear about studies on the news that talk about fuel
efficiency, or the cause of pollution, or the effects of screen time on
learning, there is often a regression model being used to support their
claims.

Types of Regression
1. Linear

A linear regression is a model where the relationship between inputs and outputs is a
straight line. This is the easiest to conceptualize and even observe in the real world.
Even when a relationship isn’t very linear, our brains try to see the pattern and attach
a rudimentary linear model to that relationship.

One example may be around the number of responses to a marketing campaign. If

we send 1,000 emails, we may get five responses. If this relationship can be
modelled using a linear regression, we would expect to get ten responses when
we send 2,000 emails. Your chart may vary, but the general idea is that we associate
a predictor and a target, and we assume a relationship between the two.

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Using a linear regression model, we want to estimate the correlation between the
number of emails sent and response rates. In other words, if the linear model fits our
observations well enough, then we can estimate that the more emails we send, the
more responses we will get.

When making a claim like this, whether it is related to exercise, happiness, health, or
any number of claims, there is usually a regression model behind the scenes to
support the claim.

In addition, the model fit can be described using a mean squared error. This
basically gives us a number to show exactly how well the linear model fits.

More serious examples of a linear regression would include predicting a patient’s

length of stay at a hospital, relationship between income and crime, education and
birth rate, or sales and temperature.

2. Multiple

Multiple regression indicates that there are more than one input variables that may
affect the outcome, or target variable. For our email campaign example, you may
include an additional variable with the number of emails sent in the last month.

By looking at both input variables, a clearer picture starts to emerge about what
drives users to respond to a campaign and how to optimize email timing and
frequency. While conceptualizing the model becomes more complex with more
inputs, the relationship may continue to be linear.

For these models, it is important to understand exactly what effect each input has
and how they combine to produce the final target variable results.

3. Non-Linear

Nonlinear regression is a form of regression analysis in which data is fit to

a model and then expressed as a mathematical function. Simple
linear regression relates two variables (X and Y) with a straight line (y =
mx + b), while nonlinear regression relates the two variables in a nonlinear
(curved) relationship.

The goal of the model is to make the sum of the squares as small as
possible. The sum of squares is a measure that tracks how far the Y
observations vary from the nonlinear (curved) function that is used to
predict Y.

Nonlinear regression uses logarithmic functions, trigonometric functions,

exponential functions, power functions, Lorenz curves, Gaussian functions,
and other fitting methods.

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KEY

• Both linear and nonlinear regression predict Y responses from an X

variable (or variables).
• Nonlinear regression is a curved function of an X variable (or
variables) that is used to predict a Y variable
• Nonlinear regression can show a prediction of population growth
over time.

Example of Nonlinear Regression

One example of how nonlinear regression can be used is to predict
population growth over time. A scatterplot of changing population data
over time shows that there seems to be a relationship between time and
population growth, but that it is a nonlinear relationship, requiring the use
of a nonlinear regression model. A logistic population growth model can
provide estimates of the population for periods that were not measured,
and predictions of future population growth.

Independent and dependent variables used in nonlinear regression should

be quantitative. Categorical variables, like region of residence or religion,
should be coded as binary variables or other types of quantitative
variables.

In order to obtain accurate results from the nonlinear regression model,

you should make sure the function you specify describes the relationship
between the independent and dependent variables accurately. Good
starting values are also necessary. Poor starting values may result in a
model that fails to converge, or a solution that is only optimal locally, rather
than globally, even if you’ve specified the right functional form for the
model.

4. Stepwise Regression Modeling

While the other items we have talked about until now are specific types of models,
stepwise regression is more of a technique. If a model involves many potential
inputs, the analyst may start with the most directly correlated input variable to build a
model. Once that is accomplished, the next step is to make the model more
accurate.

To do that, additional input variables can be added to the model one at a time in
order of significance of the results. Using our email marketing example, the initial

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model may be based on just the number of emails sent. Then we would add
something like the average age of the email recipient. After that, we would add the
average number of emails each recipient has received from us. Each additional
variable would add a small amount of additional accuracy to the model.

This process is a stepwise modeling approach to getting the most accurate

model. Alternatively, the analyst may start with a larger set of input variables and
then incrementally remove the least significant in order to get to a desired model.

Multivariate analysis
Multivariate means involving multiple dependent variables resulting in
one outcome. This explains that the majority of the problems in the real
world are Multivariate. For example, we cannot predict the weather of
any year based on the season. There are multiple factors like pollution,
humidity, precipitation, etc.

Multivariate analysis (MVA) is a Statistical procedure for analysis of

data involving more than one type of measurement or observation. It
may also mean solving problems where more than one dependent
variable is analyzed simultaneously with other variables.

Advantages and Disadvantages of

Multivariate Analysis

Advantages

• The main advantage of multivariate analysis is that since it considers

more than one factor of independent variables that influence the
variability of dependent variables, the conclusion drawn is more
accurate.

• The conclusions are more realistic and nearer to the real-life

situation.

Disadvantages

• The main disadvantage of MVA includes that it requires rather

complex computations to arrive at a satisfactory conclusion.

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• Many observations for a large number of variables need to be

collected and tabulated; it is a rather time-consuming process.

Multivariate analysis technique

Multivariate analysis technique can be classified into two broad

categories viz., This classification depends upon the question: are the
involved variables dependent on each other or not?

If the answer is yes: We have Dependence methods.

If the answer is no: We have Interdependence methods.

Dependence technique: Dependence Techniques are types of

multivariate analysis techniques that are used when one or more of the
variables can be identified as dependent variables and the remaining
variables can be identified as independent.

Multiple Discriminant Analysis

The objective of discriminant analysis is to determine group
membership of samples from a group of predictors by finding linear

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combinations of the variables which maximize the differences between

the variables being studied, to establish a model to sort objects into their
appropriate populations with minimal error.

Discriminant analysis derives an equation as a linear combination of the

independent variables that will discriminate best between the groups in
the dependent variable. This linear combination is known as the
discriminant function. The weights assigned to each independent
variable are corrected for the interrelationships among all the variables.
The weights are referred to as discriminant coefficients.

The discriminant equation:

F = β0 + β1X1 + β2X2 + … + βpXp + ε

where, F is a latent variable formed by the linear combination of the

dependent variable, X1, X2,… XP is the p independent variable, ε is the
error term and β0, β1, β2,…, βp is the discriminant coefficients.

Interdependence Technique
Interdependence techniques are a type of relationship that variables
cannot be classified as either dependent or independent.

It aims to unravel relationships between variables and/or subjects

without explicitly assuming specific distributions for the variables. The
idea is to describe the patterns in the data without making (very) strong
assumptions about the variables.

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The Objective of multivariate analysis

(1) Data reduction or structural simplification: This helps data to get
simplified as possible without sacrificing valuable information. This will
make interpretation easier.

(2) Sorting and grouping: When we have multiple variables, Groups of

“similar” objects or variables are created, based upon measured
characteristics.

(3) Investigation of dependence among variables: The nature of the

relationships among variables is of interest. Are all the variables
mutually independent or are one or more variables dependent on the
others?

(4) Prediction Relationships between variables: must be determined for

the purpose of predicting the values of one or more variables based on
observations on the other variables.

(5) Hypothesis construction and testing. Specific statistical hypotheses,

formulated in terms of the parameters of multivariate populations, are
tested. This may be done to validate assumptions or to reinforce prior
convictions.

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# Bayesian Modeling
Bayesian networks are a type of probabilistic graphical model
that uses Bayesian inference for probability computations. Bayesian
networks aim to model conditional dependence, and therefore
causation, by representing conditional dependence by edges in a
directed graph. Through these relationships, one can efficiently
conduct inference on the random variables in the graph through the
use of factors.

The Bayesian Network

Using the relationships specified by our Bayesian network, we can

obtain a compact, factorized representation of the joint probability
distribution by taking advantage of conditional independence.

A Bayesian network is a directed acyclic graph in which each

edge corresponds to a conditional dependency, and each node
corresponds to a unique random variable. Formally, if an edge (A, B)

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exists in the graph connecting random variables A and B, it means

that P(B|A) is a factor in the joint probability distribution, so we
must know P(B|A) for all values of B and A in order to conduct
inference. In the above example, since Rain has an edge going into
WetGrass, it means that P(WetGrass|Rain) will be a factor, whose
probability values are specified next to the WetGrass node in a
conditional probability table.

Bayesian networks satisfy the local Markov property, which

states that a node is conditionally independent of its non-
descendants given its parents. In the above example, this means that
P(Sprinkler|Cloudy, Rain) = P(Sprinkler|Cloudy) since Sprinkler is
conditionally independent of its non-descendant, Rain, given
Cloudy. This property allows us to simplify the joint distribution,
obtained in the previous section using the chain rule, to a smaller
form. After simplification, the joint distribution for a Bayesian
network is equal to the product of P(node|parents(node)) for all
nodes,

Inference

Inference over a Bayesian network can come in two forms.

The first is simply evaluating the joint probability of a particular

assignment of values for each variable (or a subset) in the network.
For this, we already have a factorized form of the joint distribution,
so we simply evaluate that product using the provided conditional
probabilities. If we only care about a subset of variables, we will
need to marginalize out the ones we are not interested in. In many

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cases, this may result in underflow, so it is common to take the

logarithm of that product, which is equivalent to adding up the
individual logarithms of each term in the product.

The second, more interesting inference task, is to find P(x|e), or, to

find the probability of some assignment of a subset of the variables
(x) given assignments of other variables (our evidence, e). In the
above example, an example of this could be to find P(Sprinkler,
WetGrass | Cloudy), where {Sprinkler, WetGrass} is our x, and
{Cloudy} is our e. In order to calculate this, we use the fact that
P(x|e) = P(x, e) / P(e) = αP(x, e), where α is a normalization
constant that we will calculate at the end such that P(x|e) + P(¬x | e)
= 1. In order to calculate P(x, e), we must marginalize the joint
probability distribution over the variables that do not appear in x or
e, which we will denote as Y.

For the given example , we can calculate P(Sprinkler, WetGrass | Cloudy) as

follows : P(Sprinkler, WetGrass | Cloudy) = Rain  
P(WetGrass|Sprinkler,Rain)P(Sprinker|Cloudy)P(Rain|Cloudy) P(Cloudy) =
P(WetGrass|Sprinkler,Rain)P(Sprinker|Cloudy)P(Rain|Cloudy) P(Cloudy) +
P(WetGrass|Sprinkler,Rain)P(Sprinker|Cloudy)P(Rain|Cloudy) P(Cloudy)

Support Vector Machine Algorithm

Support Vector Machine or SVM is one of the most popular Supervised Learning
algorithms, which is used for Classification as well as Regression problems. However,
primarily, it is used for Classification problems in Machine Learning.

The goal of the SVM algorithm is to create the best line or decision boundary that can
segregate n-dimensional space into classes so that we can easily put the new data

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point in the correct category in the future. This best decision boundary is called a
hyperplane.

SVM chooses the extreme points/vectors that help in creating the hyperplane. These
extreme cases are called as support vectors, and hence algorithm is termed as Support
Vector Machine. Consider the below diagram in which there are two different
categories that are classified using a decision boundary or hyperplane:

Example: SVM can be understood with the example that we have used in the KNN
classifier. Suppose we see a strange cat that also has some features of dogs, so if we
want a model that can accurately identify whether it is a cat or dog, so such a model
can be created by using the SVM algorithm. We will first train our model with lots of
images of cats and dogs so that it can learn about different features of cats and dogs,
and then we test it with this strange creature. So as support vector creates a decision
boundary between these two data (cat and dog) and choose extreme cases (support
vectors), it will see the extreme case of cat and dog. On the basis of the support vectors,
it will classify it as a cat. Consider the below diagram:

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SVM algorithm can be used for Face detection, image classification, text
categorization, etc.

Types of SVM
SVM can be of two types:

o Linear SVM: Linear SVM is used for linearly separable data, which means if a
dataset can be classified into two classes by using a single straight line, then
such data is termed as linearly separable data, and classifier is used called as
Linear SVM classifier.
o Non-linear SVM: Non-Linear SVM is used for non-linearly separated data,
which means if a dataset cannot be classified by using a straight line, then such
data is termed as non-linear data and classifier used is called as Non-linear SVM
classifier.

Hyperplane and Support Vectors in the SVM algorithm:

Hyperplane: There can be multiple lines/decision boundaries to segregate the classes
in n-dimensional space, but we need to find out the best decision boundary that helps
to classify the data points. This best boundary is known as the hyperplane of SVM.

The dimensions of the hyperplane depend on the features present in the dataset,
which means if there are 2 features (as shown in image), then hyperplane will be a
straight line. And if there are 3 features, then hyperplane will be a 2-dimension plane.

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We always create a hyperplane that has a maximum margin, which means the
maximum distance between the data points.

Support Vectors:

The data points or vectors that are the closest to the hyperplane and which affect the
position of the hyperplane are termed as Support Vector. Since these vectors support
the hyperplane, hence called a Support vector.

How does SVM works?

The working of the SVM algorithm can be understood by using an example. Suppose
we have a dataset that has two tags (green and blue), and the dataset has two features
x1 and x2. We want a classifier that can classify the pair(x1, x2) of coordinates in either
green or blue. Consider the below image:

So as it is 2-d space so by just using a straight line, we can easily separate these two
classes. But there can be multiple lines that can separate these classes. Consider the
below image:

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Hence, the SVM algorithm helps to find the best line or decision boundary; this best
boundary or region is called as a hyperplane. SVM algorithm finds the closest point
of the lines from both the classes. These points are called support vectors. The distance
between the vectors and the hyperplane is called as margin. And the goal of SVM is
to maximize this margin. The hyperplane with maximum margin is called the optimal
hyperplane.

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Non-Linear SVM:

If data is linearly arranged, then we can separate it by using a straight line, but for non-
linear data, we cannot draw a single straight line. Consider the below image:

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So to separate these data points, we need to add one more dimension. For linear data,
we have used two dimensions x and y, so for non-linear data, we will add a third
dimension z. It can be calculated as:

z=x2 +y2

By adding the third dimension, the sample space will become as below image:

So now, SVM will divide the datasets into classes in the following way. Consider the
below image:

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Since we are in 3-d Space, hence it is looking like a plane parallel to the x-axis. If we
convert it in 2d space with z=1, then it will become as:

Hence we get a circumference of radius 1 in case of non-linear data.

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Introduction to Kernel Methods

Kernels or kernel methods (also called Kernel functions) are sets of

different types of algorithms that are being used for pattern analysis. They

are used to solve a non-linear problem by using a linear classifier. Kernels

Methods are employed in SVM (Support Vector Machines) which are used

in classification and regression problems. The SVM uses what is called a

“Kernel Trick” where the data is transformed and an optimal boundary is

found for the possible outputs.

The Need for Kernel Method and its Working

Before we get into the working of the Kernel Methods, it is more important

to understand support vector machines or the SVMs because kernels are

implemented in SVM models. So, Support Vector Machines are

supervised machine learning algorithms that are used in classification and

regression problems such as classifying an apple to class fruit while

classifying a Lion to the class animal.

To demonstrate, below is what support vector machines look like:

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Here we can see a hyperplane which is separating green dots from the

blue ones. A hyperplane is one dimension less than the ambient plane.

E.g. in the above figure, we have 2 dimension which represents the

ambient space but the lone which divides or classifies the space is one

dimension less than the ambient space and is called hyperplane.

But what if we have input like this:

It is very difficult to solve this classification using a linear classifier as there

is no good linear line that should be able to classify the red and the green

dots as the points are randomly distributed. Here comes the use of kernel

function which takes the points to higher dimensions, solves the problem

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over there and returns the output. Think of this in this way, we can see

that the green dots are enclosed in some perimeter area while the red one

lies outside it, likewise, there could be other scenarios where green dots

might be distributed in a trapezoid-shaped area.

So what we do is to convert the two-dimensional plane which was first

classified by one-dimensional hyperplane (“or a straight line”) to the

three-dimensional area and here our classifier i.e. hyperplane will not be a

straight line but a two-dimensional plane which will cut the area.

In order to get a mathematical understanding of kernel, let us understand

the Lili Jiang’s equation of kernel which is:

K(x, y)=<f(x), f(y)> where,

K is the kernel function,

X and Y are the dimensional inputs,

f is the map from n-dimensional to m-dimensional space and,

< x, y > is the dot product.

Illustration with the help of an example.

Let us say that we have two points, x= (2, 3, 4) and y= (3, 4, 5)

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As we have seen, K(x, y) = < f(x), f(y) >.

Let us first calculate < f(x), f(y) >

f(x)=(x1x1, x1x2, x1x3, x2x1, x2x2, x2x3, x3x1, x3x2, x3x3)

f(y)=(y1y1, y1y2, y1y3, y2y1, y2y2, y2y3, y3y1, y3y2, y3y3)

so,

f(2, 3, 4)=(4, 6, 8, 6, 9, 12, 8, 12, 16)and

f(3 ,4, 5)=(9, 12, 15, 12, 16, 20, 15, 20, 25)

so the dot product,

f (x). f (y) = f(2,3,4) . f(3,4,5)=

(36 + 72 + 120 + 72 +144 + 240 + 120 + 240 + 400)=

1444

And,

K(x, y) = (2*3 + 3*4 + 4*5) ^2=(6 + 12 + 20)^2=38*38=1444.

This as we find out, f(x).f(y) and K(x, y) give us the same result, but the

former method required a lot of calculations(because of projecting 3

dimensions into 9 dimensions) while using the kernel, it was much easier.

Types of Kernel and methods in SVM

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Let us see some of the kernel function or the types that are being used in

SVM:

1. Liner Kernel
Let us say that we have two vectors with name x1 and Y1, then the linear

kernel is defined by the dot product of these two vectors:

K(x1, x2) = x1 . x2

2. Polynomial Kernel
A polynomial kernel is defined by the following equation:

K(x1, x2) = (x1 . x2 + 1)d,

Where,

d is the degree of the polynomial and x1 and x2 are vectors

3. Gaussian Kernel
This kernel is an example of a radial basis function kernel. Below is the

equation for this:

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The given sigma plays a very important role in the performance of the

Gaussian kernel and should neither be overestimated and nor be

underestimated, it should be carefully tuned according to the problem.

4. Exponential Kernel
This is in close relation with the previous kernel i.e. the Gaussian kernel

with the only difference is – the square of the norm is removed.

The function of the exponential function is:

This is also a radial basis kernel function.

5. Laplacian Kernel
This type of kernel is less prone for changes and is totally equal to

previously discussed exponential function kernel, the equation of

Laplacian kernel is given as:

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6. Hyperbolic or the Sigmoid Kernel

This kernel is used in neural network areas of machine learning. The

activation function for the sigmoid kernel is the bipolar sigmoid function.

The equation for the hyperbolic kernel function is:

This kernel is very much used and popular among support vector

machines.

7. Anova radial basis kernel

This kernel is known to perform very well in multidimensional regression

problems just like the Gaussian and Laplacian kernels. This also comes

under the category of radial basis kernel.

The equation for Anova kernel is :

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There are a lot more types of Kernel Method and we have discussed the

mostly used kernels. It purely depends on the type of problem which will

decide the kernel function to be used.

What is time series analysis?

Time series analysis is a specific way of analyzing a sequence of data points
collected over an interval of time. In time series analysis, analysts record
data points at consistent intervals over a set period of time rather than just
recording the data points intermittently or randomly. However, this type of
analysis is not merely the act of collecting data over time.

What sets time series data apart from other data is that the analysis can
show how variables change over time. In other words, time is a crucial
variable because it shows how the data adjusts over the course of the data
points as well as the final results. It provides an additional source of
information and a set order of dependencies between the data.

Time series analysis typically requires a large number of data points to

ensure consistency and reliability. An extensive data set ensures you have a
representative sample size and that analysis can cut through noisy data. It
also ensures that any trends or patterns discovered are not outliers and can
account for seasonal variance. Additionally, time series data can be used for
forecasting—predicting future data based on historical data.

Or

What is Time Series Analysis

Definition:

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A time series is nothing but a sequence of various data points that occurred in a
successive order for a given period of time
Objectives:

• To understand how time series works, what factors are affecting a

certain variable(s) at different points of time.
• Time series analysis will provide the consequences and insights of
features of the given dataset that changes over time.
• Supporting to derive the predicting the future values of the time
series variable.
• Assumptions: There is one and the only assumption that is
“stationary”, which means that the origin of time, does not affect the
properties of the process under the statistical factor.

How to analyze Time Series?

Quick steps here for your reference, anyway. Will see this in detail in this
article later.

• Collecting the data and cleaning it

• Preparing Visualization with respect to time vs key feature
• Observing the stationarity of the series
• Developing charts to understand its nature.
• Model building – AR, MA, ARMA and ARIMA
• Extracting insights from prediction

Significance of Time Series and its types

TSA is the backbone for prediction and forecasting analysis, specific to the
time-based problem statements.

• Analyzing the historical dataset and its patterns

• Understanding and matching the current situation with patterns
derived from the previous stage.
• Understanding the factor or factors influencing certain variable(s) in
different periods.

With help of “Time Series” we can prepare numerous time-based analyses

and results.

• Forecasting
• Segmentation
• Classification

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• Descriptive analysis`
• Intervention analysis

Components of Time Series Analysis

• Trend
• Seasonality
• Cyclical
• Irregularity

• Trend: In which there is no fixed interval and any divergence within

the given dataset is a continuous timeline. The trend would be
Negative or Positive or Null Trend
• Seasonality: In which regular or fixed interval shifts within the dataset
in a continuous timeline. Would be bell curve or saw tooth
• Cyclical: In which there is no fixed interval, uncertainty in movement
and its pattern
• Irregularity: Unexpected situations/events/scenarios and spikes in a
short time span.

What are the limitations of Time Series Analysis?

Time series has the below-mentioned limitations, we have to take care of
those during our analysis,

• Similar to other models, the missing values are not supported by TSA
• The data points must be linear in their relationship.
• Data transformations are mandatory, so a little expensive.
• Models mostly work on Uni-variate data.

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Time series analysis examples

Time series analysis is used for non-stationary data—things that are
constantly fluctuating over time or are affected by time. Industries like
finance, retail, and economics frequently use time series analysis because
currency and sales are always changing. Stock market analysis is an
excellent example of time series analysis in action, especially with
automated trading algorithms. Likewise, time series analysis is ideal for
forecasting weather changes, helping meteorologists predict everything
from tomorrow’s weather report to future years of climate change.
Examples of time series analysis in action include:

• Weather data

• Rainfall measurements

• Temperature readings

• Heart rate monitoring (EKG)

• Brain monitoring (EEG)

• Quarterly sales

• Stock prices

• Automated stock trading

• Industry forecasts

• Interest rates

Rule Induction
Rule induction is a data mining process of deducing if-then rules from a data set. These
symbolic decision rules explain an inherent relationship between the attributes and class
labels in the data set. Many real-life experiences are based on intuitive rule induction. For
example, we can proclaim a rule that states “if it is 8 a.m. on a weekday, then highway traffic
will be heavy” and “if it is 8 p.m. on a Sunday, then the traffic will be light.” These rules are
not necessarily right all the time. 8 a.m. weekday traffic may be light during a holiday
season. But, in general, these rules hold true and are deduced from real-life experience based
on our every day observations. Rule induction provides a powerful classification approach
hat can be easily understood by the general users. It is used in predictive analytics by classification of
unknown data. Rule induction is also used to describe the patterns in the data. The easiest way to
extract rules from a data set is from a decision tree that is developed on the same data set.

Downloaded by Mayank Kumar ([email protected])

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Downloaded by Mayank Kumar ([email protected])