Case Studies of Data Science

Unit 6

Weather forecasting, Stock market prediction, Object recognition, Real Time Sentiment Analysis.
 Weather forecasting
• Ever wondered how the news channel predicts the weather conditions accurately? The answer is because of
data science. It always works in the background in the whole process of weather prediction. For all
individuals and organizations, it is a great deal to know the accurate situation of the weather.

• Many businesses are directly or indirectly linked with climatic conditions. For instance, agriculture relies on
weather forecasting to plan for when to plant, irrigate and harvest.

• Similarly, other occupations like construction work, airport control authorities and many more are
dependent on the forecasting of weather. With its help, businesses can work with more accuracy and
without any disruptions.

• Weather forecasts are made by collecting the maximum amount of data possible about the current state of
the atmosphere (particularly the temperature, humidity, and wind) and using the understanding of
atmospheric processes to determine how the atmosphere evolves in the future.
Weather forecasting Process
 Weather forecasting Process
• Predictive Modeling and Machine Learning

• Weather models are at the heart and they are used both for forecasting and to recreate historical data.
However, over the last decade, machine learning has increasingly come to be applied in atmospheric
science.

• Machine learning takes weather data and builds relationships between the available data and the relative
predictors. ML can help improve physically grounded models, and by combining both approaches, they can
get accurate results. Sophisticated models and ML are used to forecast the weather using a combination of
physical models and measured data on huge computer systems.

• Over the last few years, data scientists have come to realize that in the foreseeable future they are always
going to need ML and predictive models to be able to provide close to perfect results. They say- Artificial
Intelligence (AI) is the next step to guard the storms!
 Weather forecasting Process
• Data – A Crucial Part of Weather Predictions

• It is necessary to have the right data to be close to accurate decisions. The data needs to be taken with
respect to the location and the time at which it is noted has to be considered.

• Today, all the devices are IoT-enabled with gyrometer, barometers and all sorts of sensors in it. So, the
location from one standpoint to another is very well available. Therefore, mobile phones proved to be
revolutionizing the analytics weather industry and they have really changed the industry.

• In the case of using weather data, the data has to be used within minutes itself because nobody wants to
know what had happened in the past. All of which is important – what is happening now and what will
happen in the future. So in order to come up with meaningful information, the data has to fall in and fall out
quickly and recycle quickly, within minutes.
 Weather forecasting Process
• Satellite Imagery and Sensor Data

• Today, the primary source of atmospheric science is satellite imagery and that does not mean pretty pictures though!

• Satellite imagery comes in different sizes and shapes. Some satellites operate in the black and white spectrum, some can be
useful to identify and measure clouds, others to measure winds over the oceans.

• Most data scientists rely on satellite imagery to generate short term forecasts, to determine whether a forecast is correct, and
to validate models too.

• Machine learning is also used here for pattern matching. If it acknowledges a pattern that has already appeared in the past, it
can be used to predict what is going to happen in the future.

• Sensor data are mostly used to make predictions at a local level to ground-truth weather models when using reliable
equipment.

• This is a satellite image of the formation of low-pressure areas in Odisha coast in India. Thirteen days before the cyclone ‘Fani’
hit the area, IMD ( the India Meteorological Department) had an indication that there could be a massive storm and they
started preparing for the outbreak.

• A record 1.2 million people (equal to the population of Mauritius) were evacuated in less than 48 hours just because of data
scientists. It was one of the strongest cyclones to have hit India in the last 20 years.
 Advantages of Weather Forecasting
Below are the essential benefits of weather forecasting:

• People are warned prior to what the weather will be like on a particular day.
• To help people take proper precautions to secure themselves and their families in case of unwanted
occurrences.
• Organizations can work better with the help of accurate weather predictions.
• It helps to deliver visual forecasts by various methods that most companies prefer.
• Weather forecasting highly benefits the agriculture sector for buying/selling livestock.
• It also assists the farmers to decide when to plant crops, pastures, and when to irrigate. Because having a
system that tells you the soil is dry but you don’t need to irrigate because it is going to rain after a few hours
seems to be an interesting use case. Isn’t it?
• It is the best method for management of inventory, selling strategies and crop forecasts.
• It provides the business with valuable information that the business can use to make decisions about future
business strategies.
 Stock Market Prediction
Understanding the Stock Market

Factors influencing stock market movements

• Economic Indicators: Economic indicators, such as GDP growth, inflation rates, interest rates, and employment data, have a
considerable impact on investor expectations and market movements.

• Company Performance: Stock prices are impacted by a company’s financial performance, which includes revenue, earnings, and
profitability. Factors like product launches, mergers and acquisitions, and management changes can also impact stock prices.

• Market Sentiment: Factors such as market optimism, fear, and risk appetite can drive buying or selling activity.

• Geopolitical Events: Uncertainty and volatility in the stock market can be brought on by political developments, international ties, and
geopolitical conflicts. Events like elections, trade disputes, and geopolitical conflicts can impact investor confidence and market
stability.

• Regulatory Changes: Stock prices can be greatly impacted by changes to government regulations and policies that pertain to certain
businesses or industries. These changes may include tax reforms, industry regulations, or shifts in monetary or fiscal policies.
 Stock Market Prediction

Historical challenges in predicting stock market trends

• Randomness and Complexity: The stock market is influenced by an immense number of variables, making it a complex system. It is
challenging to capture and model the intricate relationships and interactions between these variables accurately.

• Unpredictable Events: Unforeseen events such as natural disasters, political crises, or unexpected economic shocks can disrupt the
stock market. These unpredictable occurrences have the potential to have significant, immediate effects on stock values.

• Market Efficiency: The stock market is known for its efficiency, meaning that prices quickly incorporate all available information. As a
result, any attempt to predict stock prices based on historical data or publicly available information may already be reflected in the
current market prices.

• Behavioral Biases: Emotions, cognitive biases, and herd mentality frequently cause investor behavior to stray from logic. These
behavioral factors make it challenging to predict market movements solely based on fundamental analysis or historical patterns.

• Data Limitations: Financial data is vast, complex, and often incomplete or inaccurate. Obtaining high-quality data for analysis can be a
challenge, limiting the accuracy and reliability of predictive models.
 Stock Market Prediction

Data Science's Function in Stock Market Prediction

Data science employs a variety of techniques and tools to analyze and predict stock market trends. These include:

• Machine Learning: In order to produce forecasts, machine learning algorithms can find patterns and connections in past stock market
data. Models can be trained on historical data to predict future stock prices using supervised learning methods like linear regression,
decision trees, and support vector machines.

• Time Series Analysis: Time series analysis is the study and forecasting of data points gathered over a period of time. Stock market
movements can be modeled and predicted using historical time series data using methods like exponential smoothing, state space
models, and autoregressive integrated moving average (ARIMA).

• Natural Language Processing (NLP): NLP techniques allow for the examination of news articles, social media sentiment, and financial
data to determine pertinent information that may have an impact on stock prices and assess market mood. Sentiment analysis and
topic modeling are commonly used NLP techniques in stock market prediction.

• Data Visualization: Data visualization tools help in understanding patterns, trends, and relationships within stock market data.
Interactive charts, graphs, and dashboards provide visual representations of data, aiding in decision-making and identifying key
insights.
 Stock Market Prediction

Application of data science in financial markets

• Portfolio Optimization: Data science techniques can assist in optimizing investment portfolios by analyzing historical performance, risk
profiles, and correlation between different assets. This helps in diversifying investments and maximizing returns.

• Risk Management: Data science models can quantify and assess various risks associated with investments, such as market risk, credit
risk, and operational risk. This aids in designing risk mitigation strategies and setting appropriate risk management frameworks.

• Algorithmic Trading: By analyzing market data in real-time, data science algorithms can automate trading choices. High-frequency
trading, quantitative trading, and algorithmic execution strategies leverage data science techniques to execute trades efficiently and
exploit market inefficiencies.
 Object recognition
Data science is extensively used in image processing to extract information, enhance images, and perform
various tasks such as object recognition, image classification, and image segmentation. Here are some key
applications of data science in image processing:
• Image Classification: Data science techniques, particularly deep learning, have revolutionized image
classification tasks. By training convolutional neural networks (CNNs) on large labeled datasets, data
scientists can develop models that can classify images into different categories with high accuracy. Image
classification finds applications in various fields, including medical imaging, autonomous vehicles, and
surveillance systems.
• Object Detection and Recognition: Data science techniques are used to detect and recognize objects
within images. Object detection algorithms, such as the popular Faster R-CNN and YOLO (You Only Look
Once), employ deep learning to identify objects in images and provide bounding box coordinates. These
techniques are widely used in applications like self-driving cars, video surveillance, and augmented reality.
• Image Segmentation: Data science techniques enable image segmentation, where an image is divided into
different regions or segments based on their visual characteristics. Deep learning models, such as U-Net
and Mask R-CNN, have been successfully applied to segment objects in medical images, satellite imagery,
and more. Image segmentation is useful in applications like medical diagnosis`, image editing, and object
tracking.
Object recognition
 Object recognition
• Image Restoration and Enhancement: Data science methods are employed to restore or enhance
degraded or low-quality images. Techniques such as denoising, deblurring, and super-resolution utilize
machine learning algorithms to reconstruct high-quality images from noisy or blurry inputs. These methods
find applications in medical imaging, surveillance, and forensic analysis.

• Facial Recognition: Data science plays a key role in facial recognition systems, enabling the identification
and verification of individuals from facial images or video footage. Deep learning algorithms, such as
Convolutional Neural Networks (CNNs) and Siamese networks, are trained on large datasets to extract
facial features and match them against known identities. Facial recognition has applications in security
systems, access control, and digital identity verification.

• Image Captioning and Generation: Data science techniques are used to generate descriptive captions for
images or even create entirely new images. By combining deep learning with natural language processing,
models can be trained to understand the content of an image and generate captions that accurately
describe its content. Generative models, such as Generative Adversarial Networks (GANs), can be used to
generate new images that mimic the style or content of existing images.
 Object recognition

Facial Recognition

Image Captioning

Image Enhancement
 Real Time Sentiment Analysis

• Real-time Sentiment Analysis is a machine learning (ML) technique that automatically recognizes and
extracts the sentiment in a text whenever it occurs. It is most commonly used to analyze brand and product
mentions in live social comments and posts. An important thing to note is that real-time sentiment analysis
can be done only from social media platforms that share live feeds like Twitter does.

• The real-time sentiment analysis process uses several ML tasks such as natural language processing, text
analysis, semantic clustering, etc to identify opinions expressed about brand experiences in live feeds and
extract business intelligence from them.
 Real Time Sentiment Analysis

• Why Do We Need Real-Time Sentiment Analysis?

Real-time sentiment analysis has several applications for brand and customer analysis. These include the
following.
• Live social feeds from video platforms like Instagram or Facebook
• Real-time sentiment analysis of text feeds from platforms such as Twitter. This is immensely helpful in
prompt addressing of negative or wrongful social mentions as well as threat detection in cyberbullying.
• Live monitoring of Influencer live streams.
• Live video streams of interviews, news broadcasts, seminars, panel discussions, speaker events, and
lectures.
• Live audio streams such as in virtual meetings on Zoom or Skype, or at product support call centers for
customer feedback analysis.
• Live monitoring of product review platforms for brand mentions.
• Up-to-date scanning of news websites for relevant news through keywords and hashtags along with the
sentiment in the news.
 Real Time Sentiment Analysis
• How Is Real-Time Sentiment Analysis Done?
Below are the steps involved in the process.

• Step 1 - Data collection:

• To extract sentiment from live feeds from social media or other online sources, we first need to add live
APIs of those specific platforms, such as Instagram or Facebook. In case of a platform or online scenario
that does not have a live API, such as can be the case of Skype or Zoom, repeat, time-bound data pull
requests are carried out. This gives the solution the ability to constantly track relevant data based on your
set criteria.

• Step 2 - Data processing:

• All the data from the various platforms thus gathered is now analyzed. All text data in comments are
cleaned up and processed for the next stage. All non-text data from live video or audio feeds is transcribed
and also added to the text pipeline. In this case, the platform extracts semantic insights by first converting
the audio, and the audio in the video data, to text through speech-to-text software.
• This transcript has timestamps for each word and is indexed section by section based on pauses or changes
in the speaker. A granular analysis of the audio content like this gives the solution enough context to
correctly identify entities, themes, and topics based on your requirements. This time-bound mapping of
the text also helps with semantic search.
• Even though this may seem like a long drawn-out process, the algorithms complete this in seconds.
 Real Time Sentiment Analysis
• Step 3 - Data analysis

• All the data is now analyzed using native natural language processing (NLP), semantic clustering, and
aspect-based sentiment analysis. The platform derives sentiment from aspects and themes it discovers
from the live feed, giving you the sentiment score for each of them.
• It can also give you an overall sentiment score in percentile form and tell you sentiment based on language
and data sources, thus giving you a break-up of audience opinions based on various demographics.

• Step 4 - Data visualization

• All the intelligence derived from the real-time sentiment analysis in step 3 is now showcased on a reporting
dashboard in the form of statistics, graphs, and other visual elements. It is from this sentiment analysis
dashboard that you can set alerts for brand mentions and keywords in live feeds as well.