Regression Analysis in Machine learning

Regression analysis is a statistical method to model the relationship between a dependent

(target) and independent (predictor) variables with one or more independent variables. More
specifically, Regression analysis helps us to understand how the value of the dependent
variable is changing corresponding to an independent variable when other independent
variables are held fixed. It predicts continuous/real values such as temperature, age, salary,
price, etc.

Example: Suppose there is a marketing company A, who does various advertisement every
year and get sales on that. The below list shows the advertisement made by the company in
the last 5 years and the corresponding sales:

Now, the company wants to do the advertisement of $200 in the year 2019 and wants to
know the prediction about the sales for this year. So to solve such type of prediction
problems in machine learning, we need regression analysis.

Regression is a supervised learning technique which helps in finding the correlation between
variables and enables us to predict the continuous output variable based on the one or more
predictor variables. It is mainly used for prediction, forecasting, time series modelling, and
determining the causal-effect relationship between variables.

In Regression, we plot a graph between the variables which best fits the given
datapoints, using this plot, the machine learning model can make predictions about the data.

In simple words, "Regression shows a line or curve that passes through all the datapoints
on target-predictor graph in such a way that the vertical distance between the datapoints
and the regression line is minimum."

The distance between data points and line tells whether a model has captured a strong
relationship or not.Some examples of regression can be as:

o Prediction of rain using temperature and other factors

o Determining Market trends
o Prediction of road accidents due to rash driving.
Terminologies Related to the Regression Analysis:
o Dependent Variable: The main factor in Regression analysis which we want to
predict or understand is called the dependent variable. It is also called target
variable.
o Independent Variable: The factors which affect the dependent variables or which
are used to predict the values of the dependent variables are called independent
variable, also called as a predictor.
o Outliers: Outlier is an observation which contains either very low value or very high
value in comparison to other observed values. An outlier may hamper the result, so it
should be avoided.
o Multicollinearity: If the independent variables are highly correlated with each other
than other variables, then such condition is called Multicollinearity. It should not be
present in the dataset, because it creates problem while ranking the most affecting
variable.
o Underfitting and Overfitting: If our algorithm works well with the training dataset
but not well with test dataset, then such problem is called Overfitting. And if our
algorithm does not perform well even with training dataset, then such problem is
called underfitting.

Why do we use Regression Analysis?

As mentioned above, Regression analysis helps in the prediction of a continuous variable.
There are various scenarios in the real world where we need some future predictions such as
weather condition, sales prediction, marketing trends, etc., for such case we need some
technology which can make predictions more accurately. So for such case we need
Regression analysis which is a statistical method and used in machine learning and data
science. Below are some other reasons for using Regression analysis:

o Regression estimates the relationship between the target and the independent variable.
o It is used to find the trends in data.
o It helps to predict real/continuous values.
o By performing the regression, we can confidently determine the most important
factor, the least important factor, and how each factor is affecting the other
factors.

Regression is a process of finding the correlations between dependent and independent

variables. It helps in predicting the continuous variables such as prediction of Market
Trends, prediction of House prices, etc.

The task of the Regression algorithm is to find the mapping function to map the input
variable(x) to the continuous output variable(y).

Example: Suppose we want to do weather forecasting, so for this, we will use the Regression
algorithm. In weather prediction, the model is trained on the past data, and once the training
is completed, it can easily predict the weather for future days.
Types of Regression
There are various types of regressions which are used in data science and machine learning.
Each type has its own importance on different scenarios, but at the core, all the regression
methods analyze the effect of the independent variable on dependent variables. Here we
are discussing some important types of regression which are given below:

o Linear Regression
o Logistic Regression
o Polynomial Regression
o Support Vector Regression
o Decision Tree Regression
o Random Forest Regression
o Ridge Regression
o Lasso Regression:

Linear Regression:
o Linear regression is a statistical regression method which is used for predictive
analysis.
o It is one of the very simple and easy algorithms which works on regression and shows
the relationship between the continuous variables.
o It is used for solving the regression problem in machine learning.
o Linear regression shows the linear relationship between the independent variable
(X-axis) and the dependent variable (Y-axis), hence called linear regression.
o If there is only one input variable (x), then such linear regression is called simple
linear regression. And if there is more than one input variable, then such linear
regression is called multiple linear regression.
o The relationship between variables in the linear regression model can be explained
using the below image. Here we are predicting the salary of an employee on the basis
of the year of experience.

o Below is the mathematical equation for Linear regression:

1. Y= aX+b

Here, Y = dependent variables (target variables),

X= Independent variables (predictor variables),
a and b are the linear coefficients

Some popular applications of linear regression are:

o Analysing trends and sales estimates

o Salary forecasting
o Real estate prediction
o Arriving at ETAs in traffic.

Logistic Regression:
o Logistic regression is another supervised learning algorithm which is used to solve the
classification problems. In classification problems, we have dependent variables in a
binary or discrete format such as 0 or 1.
o Logistic regression algorithm works with the categorical variable such as 0 or 1, Yes
or No, True or False, Spam or not spam, etc.
o It is a predictive analysis algorithm which works on the concept of probability.
o Logistic regression is a type of regression, but it is different from the linear regression
algorithm in the term how they are used.
o Logistic regression uses sigmoid function or logistic function which is a complex
cost function. This sigmoid function is used to model the data in logistic regression.
The function can be represented as:

o f(x)= Output between the 0 and 1 value.

o x= input to the function
o e= base of natural logarithm.

When we provide the input values (data) to the function, it gives the S-curve as follows:
 o It uses the concept of threshold levels, values above the threshold level are rounded
up to 1, and values below the threshold level are rounded up to 0.

There are three types of logistic regression:

o Binary(0/1, pass/fail)
o Multi(cats, dogs, lions)
o Ordinal(low, medium, high)

Difference between Linear Regression and Logistic Regression:

Linear Regression Logistic Regression

Linear regression is used to predict the Logistic Regression is used to predict the
continuous dependent variable using a given set categorical dependent variable using a given set
of independent variables. of independent variables.

Linear Regression is used for solving Regression Logistic regression is used for solving
problem. Classification problems.

In Linear regression, we predict the value of In logistic Regression, we predict the values of
continuous variables. categorical variables.

In linear regression, we find the best fit line, by In Logistic Regression, we find the S-curve by
which we can easily predict the output. which we can classify the samples.

Least square estimation method is used for Maximum likelihood estimation method is used
estimation of accuracy. for estimation of accuracy.

The output for Linear Regression must be a The output of Logistic Regression must be a
continuous value, such as price, age, etc. Categorical value such as 0 or 1, Yes or No, etc.

In Linear regression, it is required that In Logistic regression, it is not required to have

relationship between dependent variable and the linear relationship between the dependent and
independent variable must be linear. independent variable.

In linear regression, there may be collinearity In logistic regression, there should not be
between the independent variables. collinearity between the independent variable.

Polynomial Regression:
o Polynomial Regression is a type of regression which models the non-linear
dataset using a linear model.
o It is similar to multiple linear regression, but it fits a non-linear curve between the
value of x and corresponding conditional values of y.
o Suppose there is a dataset which consists of datapoints which are present in a non-
linear fashion, so for such case, linear regression will not best fit to those datapoints.
To cover such datapoints, we need Polynomial regression.
o In Polynomial regression, the original features are transformed into polynomial
features of given degree and then modeled using a linear model. This means the
datapoints are best fitted using a polynomial line.
 o The equation for polynomial regression also derived from linear regression equation
that means Linear regression equation Y= b0+ b1x, is transformed into Polynomial
regression equation Y= b0+b1x+ b2x2+ b3x3+.....+ bnxn.
o Here Y is the predicted/target output, b0, b1,...bn are the regression coefficients.
o x is our independent/input variable.
o The model is still linear as the coefficients are still linear with quadratic.

Note: This is different from Multiple Linear regression in such a way that in Polynomial
regression, a single element has different degrees instead of multiple variables with the same
degree.

Support Vector Regression:

Support Vector Machine is a supervised learning algorithm which can be used for regression
as well as classification problems. So if we use it for regression problems, then it is termed as
Support Vector Regression.

Support Vector Regression is a regression algorithm which works for continuous variables.
Below are some keywords which are used in Support Vector Regression:

o Kernel: It is a function used to map a lower-dimensional data into higher dimensional

data.
o Hyperplane: In general SVM, it is a separation line
between two classes, but in SVR, it is a line which helps to
predict the continuous variables and cover most of the
datapoints.
o Boundary line: Boundary lines are the two lines apart
from hyperplane, which creates a margin for datapoints.
o Support vectors: Support vectors are the datapoints
which are nearest to the hyperplane and opposite class.

In SVR, we always try to determine a hyperplane with a maximum margin, so that maximum
number of datapoints are covered in that margin. The main goal of SVR is to consider
the maximum datapoints within the boundary lines and the hyperplane (best-fit
line) must contain a maximum number of datapoints.Consider the below image:

Here, the blue line is called hyperplane, and the other two lines are known as boundary lines.
Decision Tree Regression:
o Decision Tree is a supervised learning algorithm which can be used for solving both
classification and regression problems.
o It can solve problems for both categorical and numerical data
o Decision Tree regression builds a tree-like structure in which each internal node
represents the "test"for an attribute, each branch represent the result of the test,
and each leaf node represents the final decision or result.
o A decision tree is constructed starting from the root node/parent node (dataset), which
splits into left and right child nodes (subsets of dataset). These child nodes are further
divided into their children node, and themselves become the parent node of those
nodes. Consider the below image:

Above image showing the example of Decision Tee regression, here, the model is trying to
predict the choice of a person between Sports cars or Luxury car.

o Random forest is one of the most powerful supervised learning algorithms which is
capable of performing regression as well as classification tasks.
o The Random Forest regression is an ensemble learning method which combines
multiple decision trees and predicts the final output based on the average of each tree
output. The combined decision trees are called as base models, and it can be
represented more formally as:

g(x)= f0(x)+ f1(x)+ f2(x)+....

o Random forest uses Bagging or Bootstrap Aggregation technique of ensemble
learning in which aggregated decision tree runs in parallel and do not interact with
each other.
o With the help of Random Forest regression, we can prevent Overfitting in the model
by creating random subsets of the dataset.
Ridge Regression:
o Ridge regression is one of the most robust versions of linear regression in which a
small amount of bias is introduced so that we can get better long term
predictions.
o The amount of bias added to the model is known as Ridge Regression penalty. We
can compute this penalty term by multiplying with the lambda to the squared weight
of each individual features.
o The equation for ridge regression will be:

o A general linear or polynomial regression will fail if there is high collinearity between
the independent variables, so to solve such problems, Ridge regression can be used.
o Ridge regression is a regularization technique, which is used to reduce the complexity
of the model. It is also called as L2 regularization.
o It helps to solve the problems if we have more parameters than samples.

Lasso Regression:
o Lasso regression is another regularization technique to reduce the complexity of the
model.
o It is similar to the Ridge Regression except that penalty term contains only the
absolute weights instead of a square of weights.
o Since it takes absolute values, hence, it can shrink the slope to 0, whereas Ridge
Regression can only shrink it near to 0.
o It is also called as L1 regularization. The equation for Lasso regression will be:

L1 and L2 Regularization Methods

In order to create less complex (parsimonious) model when you have a large
number of features in your dataset, some of the Regularization techniques used
to address over-fitting and feature selection are:
1. L1 Regularization
2. L2 Regularization

A regression model that uses L1 regularization technique is called Lasso

Regression and model which uses L2 is called Ridge Regression.
The key difference between these two is the penalty term.

Lasso Regression (Least Absolute Shrinkage and Selection Operator) adds

“absolute value of magnitude” of coefficient as penalty term to the loss function.
Cost function
Again, if lambda is zero then we will get back main function whereas very large
value will make coefficients zero hence it will under-fit.

Ridge regression adds “squared magnitude” of coefficient as penalty term to the

loss function. Here the highlighted part represents L2 regularization element.

Cost function
Here, if lambda is zero then you can imagine we get back main function.
However, if lambda is very large then it will add too much weight and it will
lead to under-fitting. Having said that it’s important how lambda is chosen. This
technique works very well to avoid over-fitting issue.

The key difference between these techniques is that Lasso shrinks the less
important feature’s coefficient to zero thus, removing some feature altogether.
So, this works well for feature selection in case we have a huge number of
features.

Traditional methods like cross-validation, stepwise regression to handle

overfitting and perform feature selection work well with a small set of features
but these techniques are a great alternative when we are dealing with a large set
of features.