Exam PA · Data Transformations and Unsupervised Learning Techniques · Free Lesson

Apply principal components analysis to transform data.

Free SOA Exam PA (Predictive Analytics) lesson in Data Transformations and Unsupervised Learning Techniques. 12 min read, ~1,785 words.

Why PCA has value. When predictors are highly correlated, they carry redundant information and destabilize regression coefficients. PCA rotates the data onto new axes, the principal components, that are uncorrelated with each other. The first few often retain most of the variance, so you can drop the rest. That reduces...

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