Updated March 21, 2023

## Introduction to Data Analysis Techniques

Data analysis is the process of capturing the useful information by inspecting, cleansing, transforming and modeling data using one of its types that are descriptive analysis, regression analysis, dispersion analysis, factor analysis(independent variable to find the pattern) and time series that are part of the methods based on mathematical and statistical approach or decision trees (tree-like structure for choosing different paths), neural network (set of algorithms), fuzzy logic(a decision that is not true or false) that are part of the methods based on machine learning and artificial intelligence.

### Important Types of Data Analysis Techniques

Data analysis techniques are broadly classified into two types they are

- Methods based on Mathematical and Statistical Approaches
- Methods based on artificial intelligence and machine learning

#### Mathematical and Statistical Approaches

##### 1. Descriptive Analysis

Descriptive analysis is an important first step for conducting statistical analysis. It provides us with an idea of the distribution of data, helps detect outliers, and enables us to identify associations among variables, thus preparing the data for conducting further statistical analysis. Descriptive analysis of a huge data set can be made easy by breaking down it into two categories, they are descriptive analysis for each individual variable and descriptive analysis for combinations of variables.

##### 2. Regression Analysis

Regression analysis is one of the dominant data analysis techniques that is being used in the industry right now. In this kind of technique, we can see the relationship between two or more variables of interest and at the core, they all study the influence of one or more independent variables on the dependent variable. To see if there is any relationship between the variables or not we first need to plot the data on a chart and it will be evident if there is any relation. For example, consider the graph plotted below to have a clear understanding.

In data mining, this technique is used to predict the values of a variable, in that particular dataset. There are different types of regression models in usage. A few of them are Linear regression, logistic regression, and multiple regression.

##### 3. Dispersion Analysis

Dispersion is the extent to which a distribution is stretched or squeezed. In the mathematical approach, the dispersion can be defined in two ways, fundamentally the difference of values among themselves and secondly the difference between the average value. If the difference between the value and average is very low, then we can say that dispersion is less in this case. And some of the common measures of dispersion are variance, standard deviation, and interquartile range.

##### 4. Factor Analysis

Factor analysis is a kind of data analysis technique, which helps in finding the underlying structure in a set of variables. It helps with finding independent variables in the data set that describes the patterns and models of relationships. It is the first step towards clustering and classification procedures. Factor analysis is also related to Principal Component Analysis(PCA) but both of them are not identical we can call PCA as the more basic version of exploratory factor analysis

##### 5. Time Series

Time series analysis is a data analysis technique, that deals with the time-series data or trend analysis. Now, let us understand what is time-series data? Time series data is data in a series of particular time intervals or periods. If we see scientifically, most of the measurements are executed over time.

#### Methods based on Machine Learning and Artificial Intelligence

##### 1. Decision Trees

Decision tree analysis is a graphical representation, similar to a tree-like structure in which the problems in decision making can be seen in the form of a flow chart, each with branches for alternative answers. Decision trees are a top-down approach type, with the first decision node at the top, based on the answer at first decision node it will be divided into branches, and it will continue until the tree arrives at a final decision. The branches which do not divide any more are known as leaves.

##### 2. Neural Networks

Neural networks are a set of algorithms, which are designed to mimic the human brain. It is also known as the “Network of Artificial neurons”. The applications of neural network in data mining are very broad. They have a high acceptance ability for noisy data and high accuracy results. Based on the necessity many types of neural networks are currently being used, few of them are recurrent neural networks and convolutional neural networks. Convolutional neural networks are mostly used in Image processing, natural language processing, and recommender systems. Recurrent neural networks are mainly used for handwriting and speech recognition.

##### 3. Evolutionary Algorithms

Evolutionary algorithms use the mechanisms inspired by recombination and selection. These types of algorithms are independent of the domain and they have the ability to explore large data sets, discovering patterns and solutions. They are insensitive to noise compared with other data techniques.

##### 4. Fuzzy logic

It is an approach in computing based on “Degree of truth” rather than the common “Boolean logic” (truth/false or 0/1). As discussed above in decision trees at decision node we either have yes or no as an answer, what if we have a situation where we can’t decide absolute yes or absolute no? In these cases, fuzzy logic plays an important role. It is a diverse valued logic in which the truth value can be between completely true and completely false, that is it can take any real value between 0 and 1. Fuzzy logic is applicable when there is a significant amount of noise in the values.

### Conclusion

The tough question that all corporates or companies face is which type of data analysis technique is the best for them? We cannot define any technique as the best instead what we can do is try multiple techniques and see which one best fits our data set and use it. The above-mentioned techniques are some of the important techniques that are currently being used in the industry.

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