Finding outliers in real estate sales activity using the Cluster and Outlier Analysis tool

The next tool we'll examine is the Cluster and Outlier Analysis tool. This tool, in addition to performing hot spot analysis, identifies outliers in your data. Outliers are extremely relevant to many types of analysis. The tool starts by separating features and neighborhoods from the study area. Each feature is examined against every other feature to see if it is significantly different from the other features. Likewise, each neighborhood is examined in relationship to all other neighborhoods to see if it is statistically different than other neighborhoods. In this exercise, you'll learn how to use the Cluster and Outlier Analysis tool to find outliers (hot spots located in areas of cold spots and cold spots located in areas of hot spots).

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