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Amazon Exam MLS-C01 Topic 3 Question 104 Discussion
Topic #: 3
A finance company needs to forecast the price of a commodity. The company has compiled a dataset of historical daily prices. A data scientist must train various forecasting models on 80% of the dataset and must validate the efficacy of those models on the remaining 20% of the dataset.
What should the data scientist split the dataset into a training dataset and a validation dataset to compare model performance?
AComprehensive Explanation: The best way to split the dataset into a training dataset and a validation dataset is to pick a date so that 80% of the data points precede the date and assign that group of data points as the training dataset. This method preserves the temporal order of the data and ensures that the validation dataset reflects the most recent trends and patterns in the commodity price. This is important for forecasting models that rely on time series analysis and sequential data. The other methods would either introduce bias or lose information by ignoring the temporal structure of the data.
References:
Time Series Forecasting - Amazon SageMaker
Time Series Splitting - scikit-learn
Time Series Forecasting - Towards Data Science
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