Predictive data analytics models and their applications

Predictive Data Analytics
Models and Applications
Presented by
Bharathi Raja Asoka Chakravarthi

Outline
Introduction to Predictive Data
Analytics
Predictive Model: Regression
Predictive Model: Classification
Applications of Predictive Models

Objectives
Explain the concepts of
predictive modeling.
Illustrate predictive models.
Application of predictive models

Data
Analytics
Data analytics is the
science of analysing raw
data in order to make
conclusions about that
information.

Image reference: http://lutzfinger.com/predictive-analytics-case-private-equity/

Predictive
Modelling
Geisser (1993) defines
predictive modelling as “the
process by which a model is
created or chosen to try to
best predict the probability
of an outcome.”

Terminology
Variable1 Variable2 Variable3 Variable4 Target
variable
Training Dataset
The observations in a training data set are known as training cases.
Predictive model: a concise representation
of the input and target association
Y= F(X, )
Where Y- target variable,
X- input variables,
 -noise,
F- Predictive model

Predictive Data Analytics Models
Regression Classification

Regression
Input
Data
RegressionML
e.g. Past
House Prices
Machine
Learning
Prediction:
Value

Linear Regression
Given an input x we would like to compute an output y
In linear regression we assume that y and x are related
with the following equation:
y = wx+
where w is a parameter and  represents measurement
or other noise
X
Y

Regression Examples
https://walletinvestor.com/forex-forecast/eur-usd-predictionhttp://www.bom.gov.au/watl/about/about-latest-weather-graphs.shtml
Exchange rate predictionWeather prediction
x
x

Classification
Input
Data
ClassifierML
e.g. E-mail text
Machine
Learning
Prediction:
Category

Classification
Data: A set of data records (also called examples,
instances or cases) described by
k attributes: A1, A2, … Ak.
a class: Each example is labelled with a pre-
defined class.
Goal: To learn a classification model from the data that
can be used to predict the classes of new (future, or
test) cases/instances.
x
x

Classification Examples
https://www.dnaindia.com/mumbai/report-city-sees-a-43-rise-in-debit-and-
credit-card-frauds-2568450
https://towardsdatascience.com/applied-text-classification-on-email-spam-
filtering-part-1-1861e1a83246

Regression vs Classification
Input
Data
RegressionML
Input
Data
ClassificationML
£450
{cheap,
affordable,
expensive }

Applications
• Will this customer move their business to a
different company?
• Does a patient have a specific disease?
• Based on past choices, which movies will interest
this viewer?
• Should I sell this stock?
• Which people should we match in our online dating
service?
• Will this patient respond to this therapy?

GDPR
The General Data Protection Regulation is a
regulation in EU law on data protection and privacy
for all individual citizens of the European Union and
the European Economic Area. It also addresses the
export of personal data outside the EU and EEA
areas.
https://en.wikipedia.org/wiki/General_Data_Protection_Regulation

References:
1. Coelho, L. P., & Richert, W. (2015). Building
machine learning systems with Python. Packt
Publishing Ltd.
2. Kuhn, Max and Kjell. Johnson. 2013. Applied
Predictive Modeling. New York: Springer.
3. https://scikit-learn.org/

Predictive data analytics models and their applications

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