09. Data Preparation
AI For Trading C6 L1 A07 Data Preparation V2
Error: The formula for the upper fence is shown incorrectly as Q3−1.5×IQR. It should be Q3+1.5×IQR.
Data Preparation Essentials for AI Models
Key Processes and Techniques:
Data Cleaning:
- Remove Duplicates:
- Identical data rows, often due to errors, can lead to data leakage. Eliminate these to maintain data integrity.
- Handle Missing Values:
- Missing data can appear as Null, None, NA, NaN, or empty strings.
- Drop Rows: Direct but potentially wasteful if valuable data is omitted.
- Impute Missing Values: Use mean, median, or more advanced models like KNN.
Outlier Management:
- Outliers can be errors or rare valid events.
- Identify using IQR: If a value falls outside 1.5 times the interquartile range, consider it an outlier.
- Handling Techniques:
- Trimming: Remove incorrect values.
- Capping and Flooring: Adjust to less extreme figures.
- Leave Intact: Sometimes necessary if outliers contain vital information.
Ongoing Process:
- Data preparation is iterative.
- Involve exploratory data analysis, feature engineering, and modeling.
- Fabricate the approach based on domain expertise for optimal results.
QUIZ QUESTION::
Match each data issue with its appropriate cleaning/handling strategies.
ANSWER CHOICES:
|
Data Issues |
Cleaning/Handling Strategies |
|---|---|
Multiple identical entries |
|
Inconsistent or incorrect data entry (e.g., date and number formats) |
|
Missing data in critically important columns |
|
Extreme values that skew the data |
SOLUTION:
|
Data Issues |
Cleaning/Handling Strategies |
|---|---|
|
Extreme values that skew the data |
|
|
Missing data in critically important columns |
|
|
Inconsistent or incorrect data entry (e.g., date and number formats) |
|
|
Multiple identical entries |