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Local Outlier Factor (LOF), a density-based outlier detection technique to find frauds in credit card transactions.

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Outlier Detetction (LOF)

The LOF algorithm is an unsupervised density based outlier detection method which computes the local density deviation of a given data point with respect to its neighbors. It considers as outlier samples that have a substantially lower density than their neighbors.

Steps Involved

  • Step 1: Calculation of distance between every two data points
  • Step 2: Calculation of the distance between each point and its kth nearest neighbour [distk(o)]
  • Step 3: Calculation of k-distance neighbourhood of each point.
  • Step 4: Calculation of local reachability density (LRD).
  • Step 5: Calculation of LOFk(o).
  • Step 6: Sort the LOFk(o) in descending order and pick the top n outliers.

Results

k=100

For k=100

k=300

For k=300

Contributors

Ronak Sisodia

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Local Outlier Factor (LOF), a density-based outlier detection technique to find frauds in credit card transactions.

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