Predictive models
Using data to predict the future is exciting and doable using data analytics. In the realm of data analytics, there are two types of future predictions, outlined as follows:
- Predict a numerical value—for example, predict next year's price of Amazon's stock market.
- Predict a label or a class—for example, predict whether a customer is likely to stop purchasing your services and switch to your competition.
By and large, when we use the term prediction, we mean predicting a numerical value. To predict a class or a label, the term that is used is classification. In this chapter, we will focus on the prediction goal of data analytics, and the next chapter will cover classification.
The prediction of future numerical values also falls into two major overarching types: forecasting and regression analysis. We will briefly explain forecasting, before turning our attention to regression analysis.
Forecasting
In data analytics...
