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

Psychological affects of the slope- Practical example on my own weight loss

Psychological affects of the slope

I’ve been on a (much needed) diet since mid January.  While my progress is going really well, I was looking at the graph I’d made and was surprised how much my attitude changed when I simply changed the ratio of one axis.  I have been working in stats for ~20 years and I’m well aware of how people purposely try and lie/mislead with graphs so I didn’t think changing the ratio would affect my mood but damn was I wrong!

In the below two graphs they both have the exact same slope & R-square however, the one the left is wider (making it seem like my weight-loss is going slower), than the one on the right.

Which graph would you rather be using to see your progress?   And, yes, I know I truncated the graph at 180.  While weight is a “scale” variable (excuse the pun) I have an ideal weight I’m aiming for.  Besides, nobody wan’ts to see me at 100 lbs.

Psychological affects of the slope

Psychological affects of the slope
This experiment reminded me of Dan Ariely’s books. This one is exceptionally well written and thought provoking.

Web Scraping with AutoHotKey 107- using ClassName

web scraping with AutoHotkeyTwo women in an office smiling at a computer screen, one pointing at it while the other sits beside a green bottle on a desk.When I did my original posts on web scraping with AutoHotkey, I was unaware of ClassName  (getElementsByClassName).

About a year ago I was speaking with Jackie Sztuck from http://jszapp.com (BlackHolyman on the AHK forum) and he introduced me to ClassName.  In the past year I’ve really come to rely on it as my “go-to” for grabbing specific values from a page.   If Name or ID are present I’ll still use them however more and more sites don’t take the time to provide them.

This video demonstrates a few examples where I grab the ClassName.

Web Scraping with AutoHotkey– ClassName

Close-up of a laptop keyboard and touchpad with a USB drive and Intel and Windows stickers, showing a hardware setup for scripting