Mastering Anomaly Detection in Python

A Comprehensive Guide to Isolation Forests: Detecting Anomalies in Time Series

Sofien Kaabar, CFA

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Anomalies, also known as outliers, are data points or patterns in time series data that deviate significantly from the expected or normal behavior. These deviations can be caused by various factors, such as errors in data collection, equipment failures, or unexpected events.

In this article, we will delve deeper into the workings of isolation forests, explore practical examples, and provide insights into their implementation.

Isolation Forest Algorithm and Anomaly Detection

Identifying anomalies or outliers within datasets is a critical task with far-reaching implications. Anomalies can represent fraudulent transactions in financial data, manufacturing defects in quality control, health anomalies in medical records, or even outstretched market returns. One powerful technique that has emerged as an effective tool in this context is the isolation Forest.

Anomalies are data points that significantly differ from the majority of other data points in a dataset. They can manifest as rare events, errors, or unexpected observations. Detecting anomalies is challenging because they often hide within the noise and complexities of…

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