{"id":88907,"date":"2021-05-21T12:17:57","date_gmt":"2021-05-21T16:17:57","guid":{"rendered":"https:\/\/ibkrcampus.com\/?p=88907"},"modified":"2024-05-20T15:57:09","modified_gmt":"2024-05-20T19:57:09","slug":"machine-learning-classification-algorithms-part-iii","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/ibkr-quant-news\/machine-learning-classification-algorithms-part-iii\/","title":{"rendered":"Machine Learning Classification Algorithms \u2013 Part III"},"content":{"rendered":"\n<p><em>See&nbsp;<a href=\"\/campus\/ibkr-quant-news\/machine-learning-classification-algorithms-part-i\/\">Part I<\/a>&nbsp;and <a href=\"\/campus\/ibkr-quant-news\/machine-learning-classification-algorithms-part-ii\/\">Part II<\/a> to get insight on Supervised Learning.<\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"types-of-classification\">Types of Classification<\/h2>\n\n\n\n<p>Based on the number and level of classes present in the dataset, there are three types of classification.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"binary-classification\">Binary Classification<\/h3>\n\n\n\n<p>This type of classification has only two categories. Usually, they are boolean values &#8211; 1 or 0, True or False, High or Low. Some examples where such a classification could be used is in cancer detection or email spam detection where the labels would be positive or negative for cancer and spam or not spam for spam detection.<\/p>\n\n\n\n<p>Let us take an example. We are using a breast cancer detection dataset that can be downloaded from&nbsp;<a href=\"https:\/\/www.kaggle.com\/uciml\/breast-cancer-wisconsin-data\" target=\"_blank\" rel=\"noreferrer noopener\">here<\/a>.<\/p>\n\n\n\n<p style=\"background-color:#fcfcdb;font-size:12px\" class=\"has-background\"> \nimport pandas as pd<br>\nimport numpy as np<br>\nimport matplotlib.pyplot as plt<br>\nimport seaborn as sns<br>\ndata= pd.read_csv(&#8220;data.csv&#8221;)<br>\ndata.head()\n<\/p>\n\n\n\n<p><em><a href=\"https:\/\/gist.github.com\/quantra-go-algo\/76234db2113c879b33ec4fb8380ebd9c#file-read_data_for_classification-py\" target=\"_blank\" rel=\"noreferrer noopener\">read_data_for_classification.py<\/a>&nbsp;hosted with \u2764 by&nbsp;<a href=\"https:\/\/github.com\/\" target=\"_blank\" rel=\"noreferrer noopener\">GitHub<\/a><\/em><\/p>\n\n\n\n<figure class=\"wp-block-table is-style-stripes\"><table><thead><tr><td><\/td><td>id<\/td><td>diagnosis<\/td><td>radius_mean<\/td><td>texture_mean<\/td><td>perimeter_mean<\/td><td>area_mean<\/td><td>smoothness_mean<\/td><td>compactness_mean<\/td><td>concavity_mean<\/td><td>concave points_mean<\/td><td>symmetry_mean<\/td><td>fractal_dimension_mean<\/td><td>radius_se<\/td><td>texture_se<\/td><td>perimeter_se<\/td><td>area_se<\/td><td>smoothness_se<\/td><td>compactness_se<\/td><td>concavity_se<\/td><td>concave points_se<\/td><td>symmetry_se<\/td><td>fractal_dimension_se<\/td><td>radius_worst<\/td><td>texture_worst<\/td><td>perimeter_worst<\/td><td>area_worst<\/td><td>smoothness_worst<\/td><td>compactness_worst<\/td><td>concavity_worst<\/td><td>concave points_worst<\/td><td>symmetry_worst<\/td><td>fractal_dimension_worst<\/td><\/tr><\/thead><tbody><tr><td>0<\/td><td>842302<\/td><td>M<\/td><td>17.99<\/td><td>10.38<\/td><td>122.80<\/td><td>1001.0<\/td><td>0.11840<\/td><td>0.27760<\/td><td>0.3001<\/td><td>0.14710<\/td><td>0.2419<\/td><td>0.07871<\/td><td>1.0950<\/td><td>0.9053<\/td><td>8.589<\/td><td>153.40<\/td><td>0.006399<\/td><td>0.04904<\/td><td>0.05373<\/td><td>0.01587<\/td><td>0.03003<\/td><td>0.006193<\/td><td>25.38<\/td><td>17.33<\/td><td>184.60<\/td><td>2019.0<\/td><td>0.1622<\/td><td>0.6656<\/td><td>0.7119<\/td><td>0.2654<\/td><td>0.4601<\/td><td>0.11890<\/td><\/tr><tr><td>1<\/td><td>842517<\/td><td>M<\/td><td>20.57<\/td><td>17.77<\/td><td>132.90<\/td><td>1326.0<\/td><td>0.08474<\/td><td>0.07864<\/td><td>0.0869<\/td><td>0.07017<\/td><td>0.1812<\/td><td>0.05667<\/td><td>0.5435<\/td><td>0.7339<\/td><td>3.398<\/td><td>74.08<\/td><td>0.005225<\/td><td>0.01308<\/td><td>0.01860<\/td><td>0.01340<\/td><td>0.01389<\/td><td>0.003532<\/td><td>24.99<\/td><td>23.41<\/td><td>158.80<\/td><td>1956.0<\/td><td>0.1238<\/td><td>0.1866<\/td><td>0.2416<\/td><td>0.1860<\/td><td>0.2750<\/td><td>0.08902<\/td><\/tr><tr><td>2<\/td><td>84300903<\/td><td>M<\/td><td>19.69<\/td><td>21.25<\/td><td>130.00<\/td><td>1203.0<\/td><td>0.10960<\/td><td>0.15990<\/td><td>0.1974<\/td><td>0.12790<\/td><td>0.2069<\/td><td>0.05999<\/td><td>0.7456<\/td><td>0.7869<\/td><td>4.585<\/td><td>94.03<\/td><td>0.006150<\/td><td>0.04006<\/td><td>0.03832<\/td><td>0.02058<\/td><td>0.02250<\/td><td>0.004571<\/td><td>23.57<\/td><td>25.53<\/td><td>152.50<\/td><td>1709.0<\/td><td>0.1444<\/td><td>0.4245<\/td><td>0.4504<\/td><td>0.2430<\/td><td>0.3613<\/td><td>0.08758<\/td><\/tr><tr><td>3<\/td><td>84348301<\/td><td>M<\/td><td>11.42<\/td><td>20.38<\/td><td>77.58<\/td><td>386.1<\/td><td>0.14250<\/td><td>0.28390<\/td><td>0.2414<\/td><td>0.10520<\/td><td>0.2597<\/td><td>0.09744<\/td><td>0.4956<\/td><td>1.1560<\/td><td>3.445<\/td><td>27.23<\/td><td>0.009110<\/td><td>0.07458<\/td><td>0.05661<\/td><td>0.01867<\/td><td>0.05963<\/td><td>0.009208<\/td><td>14.91<\/td><td>26.50<\/td><td>98.87<\/td><td>567.7<\/td><td>0.2098<\/td><td>0.8663<\/td><td>0.6869<\/td><td>0.2575<\/td><td>0.6638<\/td><td>0.17300<\/td><\/tr><tr><td>4<\/td><td>84358402<\/td><td>M<\/td><td>20.29<\/td><td>14.34<\/td><td>135.10<\/td><td>1297.0<\/td><td>0.10030<\/td><td>0.13280<\/td><td>0.1980<\/td><td>0.10430<\/td><td>0.1809<\/td><td>0.05883<\/td><td>0.7572<\/td><td>0.7813<\/td><td>5.438<\/td><td>94.44<\/td><td>0.011490<\/td><td>0.02461<\/td><td>0.05688<\/td><td>0.01885<\/td><td>0.01756<\/td><td>0.005115<\/td><td>22.54<\/td><td>16.67<\/td><td>152.20<\/td><td>1575.0<\/td><td>0.1374<\/td><td>0.2050<\/td><td>0.4000<\/td><td>0.1625<\/td><td>0.2364<\/td><td>0.07678<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p style=\"background-color:#fcfcdb;font-size:12px\" class=\"has-background\"> \nsns.scatterplot(x=&#8221;radius_mean&#8221;,y=&#8221;texture_mean&#8221;,hue=&#8221;diagnosis&#8221;,data=data)\n<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" width=\"386\" height=\"267\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/02\/machine-learning-classification-algorithms-part-iii.png\" alt=\"\" class=\"wp-image-185587 lazyload\" data-srcset=\"https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2023\/02\/machine-learning-classification-algorithms-part-iii.png 386w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2023\/02\/machine-learning-classification-algorithms-part-iii-300x208.png 300w\" data-sizes=\"(max-width: 386px) 100vw, 386px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 386px; aspect-ratio: 386\/267;\" \/><\/figure>\n\n\n\n<p class=\"has-text-align-center\">Fig. 2. Scatter Plot &#8211; Texture Mean vs. Radius Mean<\/p>\n\n\n\n<p>Here you can see the two \u2018classes\u2019 &#8211; \u2018M\u2019 stands for malignant and \u2018B\u2019 stands for benign. As you can see, the classes are well divided and are easily differentiable to the naked eye for these two features. However, this will not be true for all pairs of features.<\/p>\n\n\n\n<p>Models that can be used for such a classification are:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Logistic Regression<\/li>\n\n\n\n<li>Support Vector Classifiers<\/li>\n<\/ul>\n\n\n\n<p>You can also use Decision Trees, Random Forests and other algorithms but Logistic Regression and Support Vector Classification are used exclusively for binary classification.<\/p>\n\n\n\n<p><em>Stay tuned for the next installment in this series to learn about Multi-class Classification.<\/em><\/p>\n\n\n\n<p><em>Visit QuantInsti for additional insight on this topic:&nbsp;<\/em><a href=\"https:\/\/blog.quantinsti.com\/machine-learning-classification\/\">https:\/\/blog.quantinsti.com\/machine-learning-classification\/<\/a><\/p>\n\n\n\n<p><em><small>Disclaimer: All investments and trading in the stock market involve risk. Any decisions to place trades in the financial markets, including trading in stocks or other financial instruments is a personal decision that should only be made after thorough research, including a personal risk and financial assessment and the engagement of professional assistance to the extent you believe necessary. The trading strategies or related information mentioned in this article is for informational purposes only.<\/small><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Kshitij Makwana and Satyapriya Chaudhari from QuantInsti discuss Binary Classification and offer Python examples using pandas, numpy and matplotlib.<\/p>\n","protected":false},"author":616,"featured_media":50791,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":true,"footnotes":""},"categories":[339,343,349,338,350,341,344],"tags":[851,3958,9766,9589,9634,9590,4404,852,9632,4659,1225,1224,4406,9587,9633,2308,9588],"contributors-categories":[13654],"class_list":{"0":"post-88907","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-data-science","8":"category-programing-languages","9":"category-python-development","10":"category-ibkr-quant-news","11":"category-quant-asia-pacific","12":"category-quant-development","13":"category-quant-regions","14":"tag-algo-trading","15":"tag-algorithms","16":"tag-binary-classification","17":"tag-classifier-models","18":"tag-decision-trees","19":"tag-hyperparameter-tuning","20":"tag-linear-regression","21":"tag-machine-learning","22":"tag-machine-learning-classification","23":"tag-matplotlib","24":"tag-numpy","25":"tag-pandas","26":"tag-random-forests","27":"tag-supervised-learning","28":"tag-support-vector-classifiers","29":"tag-trading-algorithms","30":"tag-unsupervised-learning","31":"contributors-categories-quantinsti"},"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- 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