What is Cluster Analysis: Methods and Examples

May 6, 2024

There are multiple domains, such as machine learning, data science, and data analytics, which require the data to be properly organized and categorized into informative groups. This requirement is more prominent with massive datasets, where identifying structures and patterns is a huge challenge.

The solution to these problems is cluster analysis, as it partitions this massive and complex dataset into groups based on the similarities between all the data points present. It allows you to identify trends, patterns, and important relationships among the datasets. This enables better decision-making and enhanced insights for further analysis.

Let’s dive into a detailed overview of cluster analysis, along with its types, algorithms, and a suitable example for better understanding.

What is Cluster Analysis?

Cluster analysis is the use of different algorithms in data analysis to categorize complex datasets into groups, also known as clusters. It works with the motive to separate the data points into groups. This should be in such a way that the data points in one group are more similar to each other than in other groups.

Cluster analysis enables you to recognize relationships and patterns in the data. This ensures that the hidden structures and analysis are uncovered, allowing you to extract valuable information, draw conclusions, and make data-driven decisions.

What are Cluster Analysis Methods?

Let's explore the different methods of cluster analysis:

Partition-Based Analysis

Partition-based analysis is a basic technique for data analysis that enables you to organize your data into groups based on certain requirements. In this process, you start by selecting seeds, known as cluster centroids. These are chosen randomly or according to some specific criteria for the dataset. The centroids act as the central points around which the clusters will be formed. 

On selecting the centroids, the data points are allocated to the specific cluster whose centroid is the closest to it. After the initial placement of the data points, the centroids are updated based on the mean or median of the data points within each cluster. This process of updating the centroid is repeated till there is no change in further updation. After this process is completed, the clusters are finalized and the corresponding data points are fixed for them. 

Hierarchical Cluster Analysis

Hierarchical cluster analysis enables you to organize your data into a hierarchy of clusters. In this type of clustering, you consider that each data point belongs to a single cluster. After this assumption, merging of the clusters takes place, based on their similarities.

The hierarchical clustering offers high flexibility as it does not require you to specify the number of clusters beforehand. Additionally, based on the data structure, its dendrogram visualizations enable you to identify the optimal number of clusters. These dendrograms basically represent the hierarchical relationships between the clusters.

The hierarchical clustering is primarily divided into two types.

Agglomerative Hierarchical Clustering

Agglomerative hierarchical clustering starts by considering each data point as a separate cluster. The next step is merging the two closest clusters into a single cluster. This step is repeated until all the data points are converged into a single cluster. 

The resultant cluster is a tree-like structure commonly known as a dendrogram. This structure specifies the hierarchical relationship between the clusters.

Divisive Hierarchical Clustering

Divisive hierarchical clustering starts by considering all the data points into a single cluster. In the next steps, the cluster is split into smaller clusters based on certain principles. This step is repeated until each data point forms its own cluster. The divisive hierarchical clustering enables you to analyze complex datasets and gain valuable insights.

Density-Based Clustering

Density-based clustering refers to the cluster analysis in which clusters in a dataset are identified according to the density of the data points in the feature space. The traditional methods of clustering are dependent on the pre-defined distances or shapes between the data points. On the contrary, the clustering algorithms that are density-based have the ability to find clusters having arbitrary size and shape.

One of the benefits of using density-based clustering is that it is unaffected by outliers and noise. This is due to its feature of not relying on any specific criteria to partition the data. This clustering provides you with a flexible and robust approach to gaining information through the patterns and structures of complex datasets. 

Grid-Based Clustering

Grid-based clustering is another technique that divides the complete feature space into a grid of cells. The cell is the central unit of cluster formation and data aggregation. This optimizes the overall clustering process and makes it efficient for large and complex datasets. 

The grid-based clustering starts by determining the grid size according to the distribution and specific requirements. Following this, the feature space is divided into a grid of cells. Each cell comprises a subset of the data points. All the cells are examined to confirm if they meet the criteria for clustering, such as having the required density and containing the required number of data points. After this examination, the clusters are created by combining the adjacent cells that satisfy all the criteria. 

Different Types of Cluster Analysis Algorithms

Let's discuss some of the popular algorithms used for cluster analysis:

K-Means Clustering

K-Means Clustering

K-means clustering is a well-known unsupervised machine learning clustering algorithm. It divides a dataset into clusters based on the similarities among the data points in that dataset. The assumption here is that there are a total of K clusters present.

The first step is allotting each data point to one cluster according to its distance from the cluster's centroid. After each data point is successfully assigned to the cluster, the next step is determining new centroids accordingly. Both these steps are repeated until there is no further change in the clusters.

Mean Shift Clustering

Mean Shift Clustering

Mean shift clustering is a popular algorithm that enables you to group the data points from the dataset according to their densities. The working of this algorithm is that each data point is shifted towards the mode of the data points. This step is repeated, and each data point is shifted towards the denser regions until there are no further changes.

This algorithm is highly flexible as it does not require the number of clusters to be specified beforehand. Additionally, it is unaffected by noise and can even identify clusters with an undefined shape.

Spectral Clustering

Spectral Clustering

Spectral clustering is a machine learning and data mining algorithm that groups the data points into clusters according to their similar features. It constructs a similarity graph that represents the relationships between the data points. This graph can be fully connected or a k-nearest neighbor graph, depending on the dataset. After the graph is successfully created, the Laplacian matrix is calculated from the graph. This matrix encapsulates the graph’s connectivity and structure. 

In the next steps, this Laplacian matrix is transformed into eigenvalues and eigenvectors using techniques like eigendecomposition or singular value decomposition. After the successful transformation into lower dimensional space, all the data points are clustered using any standard clustering algorithm.

Popular Cluster Analysis Examples

Netflix is a classic example of how cluster analysis is used to enhance user experience. By analyzing huge amounts of data on user interaction, ratings, search history, and view history, it utilizes cluster analysis techniques to group users with similar preferences. This study is based on a source that used a dataset consisting of tv shows and movies available on Netflix as of 2019.

Netflix identifies clusters based on the viewing habits of the users, such as binge watchers or occasional watchers. It also recognizes clusters based on user genres such as action movies, comedy movies, thrillers, or horrors. By analyzing these factors, Netflix offers their users personalized content by suggesting movies and web series that suit user preferences. This enables it to increase engagement and provide enhanced user satisfaction, thereby maximizing its overall sales and profit. 

Streamlining Analysis Journey with Airbyte

You have come across the different cluster analysis methods and the algorithms mentioned above. This allows you to distribute your massive and complex datasets into groups, which can be handled with convenience.


However, to analyze your data by defining it into clusters, you first need to consolidate it. To achieve this, you can leverage data integration platforms like Airbyte. It is a robust cloud-based platform that allows you to collect data from various sources and load it into a centralized destination with its extensive library of 350+ built-in connectors

Let's discuss some of Airbyte's key features:

  • Customization of Connectors: If you can't find the connector you need from the pre-existing list, you can leverage Airbyte's Connector Development Kit (CDK) to create a custom one within minutes. This allows you to effortlessly build a pipeline with your desired sources.
  • Change Data Capture: Airbyte's CDC capabilities enable you to capture and replicate incremental changes in your data systems. This means you no longer have to perform full refreshes, resulting in faster and more efficient data pipelines that support agile decision-making.
  • Easy to Use: Airbyte offers a user-friendly interface, making it easily accessible to everyone. It provides various options for designing data pipelines, such as API, Terraform Provider, and PyAirbyte, ensuring simplicity and ease of use. 
  • Transformations: Airbyte allows you to integrate with dbt (data build tool) to facilitate customized transformations.

Wrapping Up

Cluster analysis is a renowned technique to identify and explore different patterns and structures in massive datasets. In this article, you came across the different methods and algorithms to implement cluster analysis. By employing these, you can easily group the data points from large and complex data into smaller and easy-to-understand clusters.

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