How does the Box-Cox transformation handle negative data?

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Bhavesh Badani · Answer

The Box-Cox transformation doesn’t directly handle negative data. However, there’s a modified version of it for negative values. Here’s how it works: Negative Data: For negative data, we use a modified formula: f(x)=λ(x+c)λ−1​ where c is a constant added to make the data positive.We choose λ to optimize normality. Remember, the goal is to make our data more normally distributed.

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How does the Box-Cox transformation handle negative data?

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