Unsupervised learning
Machine learning on data with no labels, looking for structure the analyst did not specify, such as clustering similar items or condensing correlated variables into a few factors.
Where you will meet it
Unsupervised learning appears in 3 learning outcomes on the CFA syllabus. A few of them:
- Explain what is meant by machine learning, artificial intelligence and big data
“Machine learning is the practical subset that infers a rule from data rather than being given one: supervised learning trains on labelled examples, unsupervised learning looks for structure in unlabelled data, and deep learning stacks layers to capture relationships too complex to specify in advance.”
- Explain what deep learning is, and what machine learning is in its supervised and unsupervised forms
“Unsupervised learning has no target and looks for structure in the inputs, reducing dimensions or grouping similar observations into clusters.”
- Explain deep, supervised and unsupervised learning and how investment managers use them
“Unsupervised learning has no labels and looks for structure, as in clustering similar stocks or principal components analysis, which condenses many correlated variables into a few factors.”
See also
Practise it
Practise unsupervised learning until it is automatic: questions that explain every wrong option.
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