The data given is of the mutual funds in USA. The objective of this problem is to predict the ‘basis point spread’ over AAA bonds i.e. feature ‘bonds_aaa’ against each Serial Number.
Basis Point Spread indicates the additional return a mutual fund would give over the AAA rated bonds.
Apply linear model using GridsearchCV. Concepts utilised
- Chi square contengency test
- Box plot
- Linear regression
- GridsearchCV
- Ridge and Lasso Regressor
Steps involved:
- Perform Chi-Square test to check assosciation between features and remove the same so that the assumption for linear regression model is satisfied.
- Check for Outliers.
- Apply the linear regression model.
- Use lasso regressor and ridge regressor with the help of gridsearch cv , and check is there any improvement in the prediction.