Cluster-analysis meaning

A statistical technique that identifies clusters of stocks whose returns are highly correlated within the cluster. However, the returns are relatively uncorrelated between clusters. Cluster analysis has the ability to identify groups such as growth, cyclical, and stable stocks.
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(artificial intelligence, statistics) The classification of objects into different groups, or more precisely, the partitioning of a data set into subsets (clusters), so that the data in each subset (ideally) share some common trait - often proximity according to some defined distance measure.
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