This repository contains all codes (Python), dataset for company segmentation using clustering algorithms (K-Means, DBSCAN)
Clustering company performance Identifying patterns, segmenting firms based on financial characteristics to deliver data-driven decisions for investment, risk management, and strategic decision-making.
The data provided is of some financial indicators
Symbol: An abbreviation used to uniquely identify publicly traded shares of a particular stock on a particular stock market
Sector: The specific economic sector assigned to a company
Volatility: Standard deviation of the stock price in a year
Volume: Median of trading volume in a year
Net Profit Margin (%): A measure of financial performance calculated by dividing net income by total sales
ROE: A measure of financial performance calculated by dividing net income by shareholders' equity (shareholders' equity is equal to a company's assets minus its debt)
ROA: A measure of financial performance calculated by dividing net income by total assets
Net Cash Flow: The difference between a company's cash inflows and outflows from operations
EPS (Earnings Per Share): Company's net profit divided by the number of common shares it has outstanding
Outstanding Share: Company's stock currently held by all its shareholders
Market Capital: Company's value in the stock market
P/E Ratio: Ratio of the company's current stock price to the earnings per share
- K-Means
This results in 3 segment. First segment is about small-scale enterprises or underperforming companies with weak financial stability. Second segment consists of large corporations with strong financial backing but room for operational improvements. Companies in third segment can be classified as medium company which have high-performing and growth-oriented businesses.
- DBSCAN
This results in only 2 segment. First segment is about Firms in this cluster are likely small to medium-sized enterprises with stable but moderate financial performance, characterized by lower risk exposure and predictable cash flows. Second segment consists of Companies in this cluster likely include both large corporations with aggressive financial strategies and high-risk firms experiencing significant volatility in earnings and cash flow.
