Types of Outliers in Data Mining: How to Detect and Analyze

Key Points

• Outliers in data mining can influence data analysis and model performance, making it crucial to recognize and handle them appropriately.
• Global outliers deviate far from the distribution of a data set and can be detected through statistical methods and machine learning algorithms.
• Collective outliers are groups of data points that deviate from the general distribution, requiring special attention or further investigation.

It might not be possible for individuals to predict the future, but outliers in various data can help determine upcoming opportunities and risks. The data mining process entails the analysis and prediction of data information. In data mining, outliers are crucial because they can influence data analysis and models’ performance, so it is vital to recognize and handle them aptly to ensure accurate results. 

Outliers are data points that exist externally from expectations, and whatever you do with them results from the assumptions your data is generated on. Outlier detection can assist in tracking your organization and business operations and performance in case of sudden shifts. Such can help you adjust over time to generate revenue and avoid losses.

So read on to find out more about the various types of outliers in data mining and how to detect and analyze them. 

Global Outliers 

Global or point outliers are the simplest form of outliers. When the data point value deviates far from the distribution of a data set, we consider it a global outlier. It could result from errors in data collection, measurement errors, or unusual events. 

Global outliers can deform the results of data analysis and influence machine learning model performance. You can detect global outliers through statistical methods involving machine learning algorithms like isolation forest, one-class SVM, and data visualization tools. 

Collective Outliers 

Collective outliers are groups of data points that deviate from the data set’s general distribution. When a particular data set is considered individually, each point may not be an outlier, but when viewed as a group, the points exhibit outlier behavior. To identify these outliers, you must check the background information and how the outlier relates to different data objects. You can employ density-based methods, clustering algorithms, and subspace-based approaches to determine these outliers. 

Collective outliers can constitute exciting patterns and anomalies in data, which may require special attention or further investigation. Operating collective outliers may depend on specific uses and can involve additional group behavior analysis, contextual information consideration, and contributing factors identification. Detecting and interpreting collective outliers requires proper knowledge and understanding of data context and domains, as they are more complex than individual outliers, which do not require a focus on group behavior. 

Contextual Outliers 

Contextual or conditional outliers are data points that diverge from the expected behavior within a specific subgroup. They represent anomalous behavior within a particular context and may require further investigation. However, they may not be considered outliers in an entire dataset and only exhibit unusual behavior within a specific context.

You can detect these outliers using contextual anomaly detection, clustering, or context-aware machine learning approaches, which depend on contextual information, like time and location. You should adequately understand the domain context to detect and interpret contextual outliers because they may vary based on a specific context. 

Outliers might cause contextual anomalies, where values are within the normal global range, yet abnormal compared to seasonal patterns. Contextual outlier analysis allows you to examine various contexts and conditions valid for multiple applications. The conditions in contextual outliers are always temporal in records of a specific quantity of data over time.  

How to Detect Outliers in Data Mining

The following techniques can help you identify outliers in data mining. 

Z-Score Method 

The z-score method calculates the number of standard deviations (below or above) a data point is from the mean. The process assumes a normal distribution and may be unsuitable for non-normal data sets. To calculate the z-score, find the data set’s mean and compute the standard deviation. Afterward, calculate each data point by subtracting the mean, then divide the results by the standard deviation. The z-score is identified as a data point outlier if it exceeds a particular threshold. 

Interquartile Range Method, IQRv

In the Interquartile Range Method, outliers are detected in the dataset by dividing it into quartiles and measuring the middle variability of the data. You calculate the first quartile Q1 and the third quartile Q3, then subtract Q1 from Q3 to find the IQR (Interquartile Range). The method is convenient and often applied; however, it supposes a regular data distribution that may not correctly detect outliers for irregular datasets.

Mahalanobis Distance Method

The Mahalanobis method employs multivariate statistics to evaluate the distance of every data point from the data set mean. We consider data points with greater distances than a particular threshold to be outliers. Statistical tests give you the covariance matrix and the mean for specific data point distance to determine such. Mahalanobis technique is functional for datasets with normal distributions but non-suitable for non-normal datasets.

Density-Based Spatial Clustering of Applications With Noise, DBSCAN

DBSCAN is a collective model identifying outliers as data that are not members of any dense clusters. The technique operates under various principal parameters. The radius around each point denotes the neighborhood and the minimum points (minPts) needed to form a cluster. These parameters are adjustable to manage the number and size of sets generated by the model. 

DBSCAN is an excellent choice for datasets whose figures and shapes are unknown. It can find clusters of arbitrary shapes, unlike other models, which are only limited to detecting spherical clusters. Unfortunately, the algorithm can be delicate and might only apply to datasets with small overlapping sets. Thus, combining many algorithms may be essential. 

Local Outlier Factor, LOF

The local Outlier Factor enumerates the local density of each data point and determines outliers from the context of low local density to its neighbors. LOF can detect data points distant from most data points in the set and those far from their immediate neighbors, even if they are not distant from the majority. 

Fundamental Principles to Determining the Types of Outliers 

Outliers are signs of underlying issues that require fixing and are only visible as your detection system reveals them. Regardless of time series, data, and scale metrics, an outlier detection system should discover all types of outliers within various sectors. 

Therefore, select the most suitable model and distribution for each time series to build a comprehensive detection algorithm. This is critical because time series behave differently. It could be discrete, stationary, non-stationary, or irregularly sampled, and each may need a specific model of normal behavior with a particular distribution.

Also, you should be able to account for seasonal and trend patterns. Conditional and collective outliers cannot be identified if the trend and season are not considered in the models describing their normal behavior. You can detect these automatically for an automatic anomaly detection system, as the outliers cannot be defined manually for all data.

Additionally, you should understand how time series and accounting for trend patterns relate to detecting and investigating anomalies.

Outlier Analysis in Data Mining

Outlier analysis, also outlier mining, is a vital task in data mining. It helps identify outliers in a dataset to ensure accurate and meaningful modeling and data analysis results, allowing you to avoid making incorrect conclusions from the data. 

It is possible to discard outliers in various places through data mining; however, some systems still depend on and utilize it. This might occur because events with rare occurrences have more information than those that occur regularly. 

Outlier detection plays a significant role in various sectors, like health, telecommunication, banking, financing, environmental, and business systems. The analysis allows you to identify different behaviors during the operation of these systems, draw a valid conclusion, and make literate decisions from the data.

Some practical applications of outlier analysis include fraud detection from unusual financial transactions, quality control for factual and measurement errors, and customer behavioral analysis for businesses and marketing sectors. They can also be used in healthcare analysis for unusual treatment patterns, financial analysis to help employ investments and risk management strategies, and environmental management for unusual conditions like extreme weather. 

Steps to Conducting Outlier Analysis

1. Data Preparation

This is the first procedure for conducting data analysis, which entails cleaning and transforming the required data. 

2. Outlier Detection

This procedure involves various statistical methods, such as the Interquartile Range Method and the Mahalanobis distance method. 

3. Outlier Investigation

After identifying outliers, it is necessary to investigate what causes them and determine whether they result from errors or other phenomena. 

4. Outlier Handling 

This step relies on the investigation results. It includes data transformation, removing outliers, and using less sensitive statistical methods.

Importance of Outlier Analysis in Data Mining

Outlier analysis is significant in data mining in the following ways:

Better Data Quality

Outlier analysis helps identify exact data errors, improve data quality, and expand the reliability of data analysis and modeling. 

Enhances Understanding of Data

Outlier analysis discloses relationships and patterns in data that might be absent when only focusing on the central tendencies.

Improves Accuracy of Statistical Models 

Outliers can influence the results of statistical models, and identifying and handling them appropriately can help improve the accuracy of the models. 

Prevents Misleading Results 

Outliers can impact the data analysis and modeling outcome, and effective identification and management can help avoid incorrect conclusions from the data.

Detects Fraud and Anomalies 

Outlier analysis can help detect unusual behavioral patterns and foreign transactions, which can seriously affect business, health, and security choices.

Should Industries Accept Outlier Detection Systems? 

As the modern market continues to change rapidly, individuals in the marketplace should embrace real-time insights. Also, with the emerging expansion and continued growth of data and the spread of the Internet of Things devices, they should remain proactive to ensure the best decision-making, which will guarantee success.

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