Heteroscedasticity & Transformations- Video of “transforming” data

Heteroscedasticity & transformations

Heteroscedasticity & Transformations

Financial data often has problems with heteroscedasticity also spelled Heteroskedasticity (funnel shaped). Performing transformations is necessary however I often have a hard time explaining what the transformation is actually doing. This video helps show what is happening during a log transformation.

After watching the data literally “transform” it was much easier to grasp exactly what was happening and how it would help.  Just remember you’ll have to transform it back if you wish to interpret the values.  While the below video was created using SYSTAT, I transform data so often I have some killer SPSS macros which transform data effortlessly.

You want your data to be normally distributed around the line which is “homosecasticity“.

 

If you’re interested in reading more, SAGE has a specific book on Heteroscedasticity & transformations

Automate Excel graphs with AutoHotKey and SPSS; Automating pretty charts!

Automate Excel graphsA white stress ball with the green AutoHotkey logo being held in a hand, with a laptop keyboard blurred in the backgroundAfter 20 years of doing multivariate statistics, doing analytics is very quick and easy for me.  Putting together the report which clients will think is “pretty” and convey the results is what really takes the time!  I have a ton of macros in SPSS which greatly simplify the front-end however I’ve always preferred Excel graphs to SPSS (because they don’t look like they were drawn with crayons).

Automate Excel graphs

In the below video I demonstrate how you how you can use AutoHotKey to easily automate Excel graphs that you’ll be proud to put your name on!

Two women smiling and looking at a computer screen together in a bright office, one pointing at the monitor.

Great use of GIS data to decide your next business location

GIS Data

Years ago I helped a company that worked in the financial industry review where their current locations are and where FDIC Banks were located.  The GIS data was available for free from the FDIC.  If you spend some time you can merged the files together and look at it longitudinally.   The below map was particularly helpful in deciding where a new branch/office should be located.  I also imported the locations of competitors however I cannot share this data as it is too revealing.

I used Microsoft’s MapPoint to create the below map.  It is no longer with us however this would be easy to repeat with Google Maps.

GIS data

Here’s a great book to get ideas on conveying data visually