Book Image

Data Forecasting and Segmentation Using Microsoft Excel

By : Fernando Roque
Book Image

Data Forecasting and Segmentation Using Microsoft Excel

By: Fernando Roque

Overview of this book

Data Forecasting and Segmentation Using Microsoft Excel guides you through basic statistics to test whether your data can be used to perform regression predictions and time series forecasts. The exercises covered in this book use real-life data from Kaggle, such as demand for seasonal air tickets and credit card fraud detection. You’ll learn how to apply the grouping K-means algorithm, which helps you find segments of your data that are impossible to see with other analyses, such as business intelligence (BI) and pivot analysis. By analyzing groups returned by K-means, you’ll be able to detect outliers that could indicate possible fraud or a bad function in network packets. By the end of this Microsoft Excel book, you’ll be able to use the classification algorithm to group data with different variables. You’ll also be able to train linear and time series models to perform predictions and forecasts based on past data.
Table of Contents (19 chapters)
1
Part 1 – An Introduction to Machine Learning Functions
5
Part 2 – Grouping Data to Find Segments and Outliers
10
Part 3 – Simple and Multiple Linear Regression Analysis
14
Part 4 – Predicting Values with Time Series

The regression model's value ranges

As we have seen, the regression model is not an exact answer for our prediction's needs because it depends on the level of relationship between the causal variables and the Y result/effect variable.

Taking this into account, a more realistic model would be to present three possible prediction scenarios. The scenarios depend on the confidence level of the slope. We have the upper and lower scenario depending on the value assigned to the slope.

The formula for the confidence levels of the slope is as follows:

From previous calculations of this example, we know the following:

We also know this:

The confidence level of the slope is between the upper values equal to 0.057219394 and the lower values equal to 0.04064002.

With this information, we can build a chart with three scenarios:

  • The linear model without the confidence level
  • The upper limit of the model
  • The lower limit of the model

Let...