Combining features with mathematical functions
New features can be created by combining existing variables with mathematical and statistical functions. Taking an example from the finance industry, we can calculate the total debt of a person by summing up their debt across individual financial products, such as car loan, mortgage, or credit card debt:
Total debt = car loan debt + credit card debt + mortgage debt
We can also derive other insightful features using alternative statistical operations. For example, we can determine the maximum debt of a customer across financial products or the average time a user spends on a website:
maximum debt = max(car loan balance, credit card balance, mortgage balance)
average time on website = mean(time spent on homepage, time spent on about page, time spent on FAQ page)
We can, in principle, use any mathematical or statistical operation to create new features, such as the product, mean, standard deviation, or maximum or minimum values...
