Comparative Guide: Top 7 Outlier Detection Algorithms & How To Tutorials In Python

by | Aug 7, 2023 | Data Science, Machine Learning

Outlier detection in machine learning

Outlier detection is a task in machine learning and data analysis involving identifying points that deviate significantly from the rest of the data. These data points are called outliers and can be caused by various factors such as measurement errors, data corruption, or rare events. Outliers can significantly impact the results of machine learning models, leading to biased predictions and inaccurate insights. Therefore, detecting and handling outliers is crucial for ensuring the quality and robustness of machine learning models.

There are several approaches to outlier detection in machine learning:

1. Statistical methods for outlier detection

Statistical methods for outlier detection involve using various statistical techniques to identify data points that deviate significantly from the expected statistical properties of the rest of the data.

outlier detection on a regression problem

Statistical methods are the simplest to implement and understand.


  1. Simple Interpretation: Statistical methods are often straightforward to understand and interpret, making them accessible to non-experts.
  2. No Complex Parameters: Many statistical methods do not require tuning of complex parameters, making them easy to use.
  3. Applicability to Normally Distributed Data: These methods work well when the data follows a normal distribution.
  4. Robustness to Mild Outliers: Statistical methods can handle mild outliers that do not deviate significantly from the distribution.


  1. Assumption of Data Distribution: Many statistical methods assume that the data follows a specific distribution, such as the normal distribution, which might not be valid for all datasets.
  2. Sensitivity to Extreme Values: Statistical methods can be sensitive to extreme values and may incorrectly identify them as outliers.
  3. Limited Applicability to Non-Normal Data: Statistical methods may not perform well when data deviates significantly from a normal distribution.
  4. Difficulty in Handling Multivariate Data: Handling multivariate data can be complex, and some statistical methods are better suited for univariate data.


  1. Quality Control: Detecting anomalies in manufacturing processes by identifying products that deviate from the expected standards.
  2. Financial Fraud Detection: Identifying unusual transactions that do not conform to the typical spending patterns of legitimate users.
  3. Healthcare Analytics: Detecting rare medical conditions by identifying patients with unusual symptoms or test results.
  4. Climate Anomaly Detection: Identifying unusual weather patterns or extreme climate events that stand out from historical data.
  5. Stock Market Analysis: Detecting abnormal price movements in the stock market that might indicate irregular trading activities.
  6. Predictive Maintenance: Identifying equipment or machinery that will likely fail by detecting deviations from normal operating conditions.

Statistical methods include the Z-score method, modified Z-score method, percentile-based approaches, and more. While these methods have their strengths in simplicity and ease of interpretation, they should be used with caution and combined with other procedures, especially when dealing with non-normally distributed or high-dimensional data.

2. Distance-based methods for outlier detection

Distance-based outlier detection methods are based on the idea that outliers are data points far away from most of the data points. These methods calculate the distances between data points and use these distances to identify outliers.


  1. Intuitive Interpretation: Distance-based methods have an intuitive interpretation. Outliers are those data points significantly distant from the centre of the data distribution.
  2. No Assumptions about Data Distribution: These methods do not rely on specific assumptions about the data distribution, making them versatile and applicable to various types of data.
  3. Robust to Multivariate Data: Distance-based methods can handle data with multiple features and dimensions.
  4. Ability to Handle Clusters: They can identify global outliers (far from all data points) and local outliers (far from some data points but close to others).


  1. Sensitivity to Dimensionality: As the number of dimensions increases, the “curse of dimensionality” becomes a concern, making distance-based methods less effective in high-dimensional spaces.
  2. Choice of Distance Metric: The choice of distance metric can significantly affect the results. Selecting an appropriate distance metric for the data at hand is crucial.
  3. Computationally Intensive: Calculating distances for all pairs of data points can be computationally expensive, especially for large datasets.


  1. Network Anomaly Detection: Distance-based methods can detect anomalies in network traffic by identifying connections that exhibit unusual behaviour compared to typical connections.
  2. Credit Card Fraud Detection: Unusual credit card transactions can be detected by calculating distances between transactions and finding those that deviate significantly from the norm.
  3. Customer Segmentation: Identifying customers who exhibit purchasing behaviour far from the norm can aid in targeted marketing efforts.
  4. Manufacturing Quality Control: Detecting defects in manufacturing processes by identifying products that exhibit unusual characteristics compared to most products.
  5. Environmental Monitoring: Detecting outliers in environmental sensor data to identify pollution spikes or abnormal conditions.
  6. Genomics and Bioinformatics: Identifying genes or genetic sequences with significantly different characteristics from the majority can indicate anomalies or diseases.
  7. Geospatial Data Analysis: Identifying spatial outliers in geographical datasets, such as detecting unexpected concentrations of events.

Distance-based methods include algorithms like k-nearest neighbours (k-NN) and DBSCAN (Density-Based Spatial Clustering of Applications with Noise). While they have limitations, they offer a straightforward approach to outlier detection, mainly when the data’s distribution is unknown or when the outliers are expected to be far from the bulk of the data.

3. Density-based methods for outlier detection

Density-based outlier detection methods focus on identifying regions with lower data density, assuming that outliers are data points in sparse areas. These methods are handy for datasets where outliers have different densities than the rest of the data.


  1. Robust to Data Distribution: Density-based methods do not assume any specific data distribution, making them suitable for many datasets.
  2. Effective with Irregularly Shaped Clusters: They can detect outliers in clusters of varying shapes and sizes and noisy environments.
  3. Flexibility in Parameter Selection: Density-based methods like DBSCAN have parameters that allow you to control the method’s sensitivity to density differences, providing flexibility in outlier detection.
  4. Handling Clusters and Noise: Density-based methods can effectively separate dense clusters from sparser ones, which is particularly beneficial in the presence of noise.


  1. Parameter Sensitivity: The performance of density-based methods can be sensitive to the choice of parameters, such as the neighbourhood radius and a minimum number of points.
  2. Difficulty with High-Dimensional Data: Like other methods, density-based techniques can suffer from the “curse of dimensionality” as the number of features increases.
  3. Memory and Computational Requirements: Calculating densities and maintaining neighbourhood information can be memory and computationally intensive, especially for large datasets.


  1. Anomaly Detection in Network Intrusion: Identifying unusual patterns in network traffic, indicating potential cyberattacks or intrusions.
  2. Fraud Detection in Financial Transactions: Detecting abnormal transaction patterns that deviate from the regular behaviour of legitimate users.
  3. Environmental Monitoring: Detecting unusual behaviour in sensor data, such as identifying anomalies in pollution levels or temperature readings.
  4. Spatial Outlier Detection: Identifying spatial anomalies in geographical datasets, like detecting regions with significantly lower crime rates in a crime dataset.
  5. Quality Control in Manufacturing: Detecting manufacturing process defects by identifying products with significantly different characteristics.
  6. Healthcare and Disease Detection: Identifying rare medical conditions or unusual patient data in healthcare datasets.

Density-based methods, such as DBSCAN (Density-Based Spatial Clustering of Applications with Noise) and OPTICS (Ordering Points To Identify the Clustering Structure), provide a valuable approach to detecting outliers in datasets with varying densities and irregularly shaped clusters. While they require careful parameter tuning and might not be suitable for high-dimensional data, they excel in scenarios where outliers are expected to occur in low-density regions.

4. Clustering methods for outlier detection

Clustering methods, which group similar data points together, can indirectly be used for outlier detection by considering data points that don’t belong to any cluster as potential outliers.


  1. Inherent Grouping: Clustering naturally groups data points with similar characteristics, making it possible to identify points that do not belong to any cluster.
  2. Flexibility: Clustering can work with various types of data and handle multivariate data.
  3. Global and Local Patterns: Clustering methods can help identify global outliers (far from all clusters) and local outliers (far from a specific cluster).


  1. Sensitivity to Hyperparameters: Clustering methods often require setting parameters like the number of clusters (k). The choice of these parameters can affect the results, including the detection of outliers.
  2. Density and Shape of Clusters: The success of clustering-based outlier detection heavily relies on the data’s distribution and shape of clusters.
  3. Complexity: Clustering algorithms can be computationally intensive, particularly for large datasets or high-dimensional data.


  1. Image and Object Detection: Identifying objects in images that deviate significantly from typical patterns or don’t belong to any recognizable class.
  2. Anomaly Detection in Network Traffic: Detecting unusual network behaviour that might not follow typical communication patterns.
  3. Healthcare: Detecting abnormal patterns in patient data that don’t align with typical disease progression or patient behaviour.
  4. Fraud Detection: Identifying transactions that don’t fit typical spending patterns or deviate from user behaviour.
  5. Environmental Monitoring: Detecting unusual patterns in environmental sensor data, like identifying rare and unexpected events.
  6. Retail and Customer Behavior: Identifying customers who exhibit behaviour that doesn’t align with the majority, potentially indicating fraudulent activities.

Clustering methods like k-means, hierarchical clustering, and DBSCAN can be adapted for outlier detection by treating unclustered data points as potential outliers. It’s important to note that clustering methods might not be optimized for the sole purpose of outlier detection and can sometimes be sensitive to the distribution and structure of the data. Therefore, a careful choice of algorithm and parameter tuning is necessary for effective outlier detection using clustering.

5. Support Vector Machines (SVM) for outlier detection

Support Vector Machines (SVM) can also be employed for outlier detection through one-class classification.


  1. Effective for High-Dimensional Data: SVM can work well in high-dimensional feature spaces, which is valuable for detecting outliers in complex data.
  2. Global and Local Patterns: SVM can identify both global outliers (far from most data points) and local outliers (far from some data points).
  3. Robust to Overfitting: SVM for one-class classification is less prone to overfitting, as it tries to find a boundary separating most of the data from the region of interest.
  4. Scalability: Kernel-based SVMs allow data transformation into higher dimensions without explicitly calculating feature mappings, making them computationally efficient.
  5. Takes into Account Margin Violations: SVMs aim to maximize the margin between the decision boundary and the data points, inherently considering the presence of potential outliers.


  1. Parameter Sensitivity: The performance of SVM depends on parameters like the choice of kernel and regularization parameter. Finding suitable parameters can be challenging.
  2. Computational Complexity: SVM can become computationally intensive for large datasets, especially when using nonlinear kernels.
  3. Difficulty with Imbalanced Data: SVM might struggle when the dataset is highly imbalanced, where outliers are much fewer than normal.


  1. Anomaly Detection in Network Traffic: Identifying network attacks or intrusions that deviate from normal network behaviour.
  2. Fraud Detection: Detecting financial fraud by identifying transactions that don’t fit the regular spending patterns of legitimate users.
  3. Healthcare Analytics: Identifying patients with unusual medical conditions or behaviours that don’t conform to standard patterns.
  4. Quality Control: Detecting defects in manufacturing processes by identifying products that differ from the expected standards.
  5. Image Analysis: Identifying rare and unexpected objects in images or detecting unusual patterns that indicate anomalies.
  6. Natural Language Processing (NLP): Identifying outliers in text data, such as detecting unusual phrases or sentences that deviate from the norm.

Support Vector Machines offer a robust approach for outlier detection, especially in high-dimensional spaces where linear separation is not feasible. They can effectively identify anomalies while also accounting for margin violations. However, parameter tuning and scalability considerations should be carefully managed for optimal performance.

6. Autoencoder Neural Networks

Autoencoder neural networks can be utilized for outlier detection by training on normal data and then using reconstruction errors to identify anomalies.


  1. Nonlinear Mapping: Autoencoders can capture complex, nonlinear relationships in data, making them suitable for detecting anomalies in intricate patterns.
  2. Dimensionality Reduction: Autoencoders inherently perform dimensionality reduction by encoding data into a lower-dimensional space. This can help in highlighting anomalies.
  3. Handles Multimodal Data: Autoencoders can capture multiple modes in the data distribution, which is beneficial when anomalies exhibit different patterns.
  4. Applicability to Various Data Types: Autoencoders can work with different data types, including images, text, and numerical data.


  1. Architecture Complexity: Designing the architecture of autoencoders involves choosing the number of layers, nodes, and bottleneck size. This can be challenging and might require experimentation.
  2. Training Complexity: Training deep autoencoders can be computationally intensive and require careful optimization of hyperparameters.
  3. Overfitting Risk: Autoencoders can overfit to the normal data if not correctly regularized, leading to anomalies not being detected.


  1. Image Anomaly Detection: Identifying anomalies in image data, such as detecting defects in manufactured products.
  2. Fraud Detection: Detecting unusual patterns in financial transactions, such as identifying fraudulent activities.
  3. Healthcare Analytics: Identifying patients with rare diseases or abnormal symptoms based on medical data.
  4. Cybersecurity: Detecting unusual patterns in network traffic that might indicate cyberattacks or intrusions.
  5. Natural Language Processing (NLP): Identifying unusual language patterns or content in text data.
  6. Industrial Quality Control: Detecting anomalies in sensor data from manufacturing processes.

Autoencoder neural networks can uncover intricate patterns and relationships in data, making them valuable for outlier detection tasks. However, their architecture complexity and training requirements demand careful design and optimization to ensure effective anomaly detection without overfitting.

7. Isolation forest

Isolation Forest is an outlier detection algorithm that is based on the concept of isolation. It was introduced in 2008 by Fei Tony Liu, Kai Ming Ting, and Zhi-Hua Zhou. The main idea behind Isolation Forest is to isolate outliers more efficiently using binary trees (i.e., decision trees with only two branches at each node). It is particularly well-suited for high-dimensional data and can be faster and more effective than other outlier detection methods, especially in large datasets.

The algorithm works as follows:

Training Phase:

  • The algorithm randomly selects a feature and a random split value within the range of the selected feature for each node in the tree.
  • It recursively divides the data into two parts at each node until each data point is isolated in its leaf node or the maximum tree depth is reached.

Scoring Phase:

  • To detect outliers, the algorithm measures the number of splits required to isolate a data point. If an outlier exists, it will likely be separated in fewer steps than inliers.
  • The isolation score for each data point is calculated as the average path length from the root node to the leaf node in the tree.


  • A threshold is defined to determine which data points are considered outliers. Points with isolation scores above the threshold are considered outliers, while lower scores are considered inliers.


  1. Efficiency: Isolation Forest is efficient for high-dimensional datasets and can handle large amounts of data more effectively than other outlier detection methods.
  2. No Assumption of Data Distribution: It doesn’t assume any specific data distribution, making it applicable to a wide range of data types.
  3. Scalability: The algorithm is parallelizable and can use multi-core processors, making it efficient for large-scale datasets.
  4. Handles Clusters and High-Dimensional Data: Isolation Forest can effectively handle clustered data and data with many features.
  5. Low Sensitivity to Parameters: It has fewer parameters to tune than other methods, making it relatively easier to use.
  6. Global and Local Anomaly Detection: Isolation Forest can detect both global outliers (far from most data points) and local outliers (far from some data points).


  1. Risk of Overfitting: Isolation Forest can be prone to overfitting if the number of trees in the ensemble is too high or if the data contains noise.
  2. Not as Effective with Structured Data: It might not perform as well on datasets with structured data where anomalies are not necessarily isolated.
  3. Parameter Tuning: While it has fewer parameters to tune, some parameter adjustments might still be needed for optimal performance.


  1. Network Security: Identifying unusual patterns in network traffic or cybersecurity data that might indicate cyberattacks or intrusions.
  2. Fraud Detection: Detecting fraudulent activities in financial transactions by identifying transactions that deviate from normal spending patterns.
  3. Anomaly Detection in Time Series Data: Detecting anomalies in time-dependent data, such as monitoring industrial processes for deviations.
  4. Healthcare: Identifying rare and abnormal medical conditions in patient data that might otherwise go unnoticed.
  5. Environmental Monitoring: Detecting abnormal patterns in environmental sensor data, such as unusual pollution levels.
  6. Quality Control: Identifying defective products in manufacturing processes by detecting deviations from expected standards.

Isolation Forest is beneficial when dealing with high-dimensional datasets and unclear data distribution situations. Its efficiency and capability to handle various data types and structures make it a versatile tool for outlier detection in multiple domains. However, careful parameter tuning and validation are necessary to ensure its optimal performance on a specific dataset.

How to implement Isolation Forest in Python 

Implementing Isolation Forest in Python can be quickly done using libraries like scikit-learn, which implements a built-in algorithm. Here’s a step-by-step guide on how to implement Isolation Forest in Python using scikit-learn:

1. Install scikit-learn

If you haven’t installed scikit-learn already, you can install it using pip:

pip install scikit-learn 

2. Import necessary libraries

import numpy as np 
from sklearn.ensemble import IsolationForest 

3. Prepare your data

Prepare your dataset as a NumPy array or a pandas DataFrame with numerical features. Make sure to handle any missing values appropriately.

4. Create and fit the Isolation Forest model

# Assuming 'X' is your feature matrix (numpy array or pandas DataFrame) 
isolation_forest = IsolationForest(n_estimators=100, contamination=0.1, random_state=42) 

In this example, we use n_estimators=100, which specifies the number of trees in the Isolation Forest ensemble. The contamination parameter defines the approximate proportion of outliers in the data. You can adjust these parameters based on your specific use case.

5. Predict outliers

Using the prediction method, you can use the trained model to predict outliers in your data. The output will be -1 for outliers and 1 for inliers (non-outliers).

# Assuming 'X_test' is your test data (numpy array or pandas DataFrame) 
y_pred = isolation_forest.predict(X_test) 

6. Access isolation scores (optional)

If you want to access the isolation scores for individual data points, use the decision_function method. The isolation score measures how isolated a data point is (lower scores indicate outliers).

isolation_scores = isolation_forest.decision_function(X_test) 

That’s it! You now have an implementation of Isolation Forest in Python using scikit-learn. Remember to tune the hyperparameters and thresholding (if needed) based on the characteristics of your data and the specific requirements of your outlier detection task.

How to do outlier detection in Python

In addition to the step-by-step example above, you can perform outlier detection using various techniques and libraries in Python. Let’s explore some commonly used outlier detection methods along with their implementations:

Z-Score Method

import numpy as np
from scipy import stats

def z_score_outliers(data, threshold=3):
    z_scores = np.abs(stats.zscore(data))
    return np.where(z_scores > threshold)

# Example usage:
data = np.array([1, 2, 3, 10, 20, 25, 30])
outliers = z_score_outliers(data)
print("Outliers:", data[outliers])

IQR Method

import numpy as np

def iqr_outliers(data, k=1.5):
    q1 = np.percentile(data, 25)
    q3 = np.percentile(data, 75)
    iqr = q3 - q1
    lower_bound = q1 - k * iqr
    upper_bound = q3 + k * iqr
    return np.where((data < lower_bound) | (data > upper_bound))

# Example usage:
data = np.array([1, 2, 3, 10, 20, 25, 30])
outliers = iqr_outliers(data)
print("Outliers:", data[outliers])

Local Outlier Factor (LOF) (using scikit-learn)

import numpy as np
from sklearn.neighbors import LocalOutlierFactor

# Assuming 'X' is your feature matrix (numpy array or pandas DataFrame)
lof = LocalOutlierFactor(n_neighbors=20, contamination=0.1)
y_pred = lof.fit_predict(X)

# LOF outputs -1 for outliers and 1 for inliers
outliers = np.where(y_pred == -1)
print("Outliers:", X[outliers])

Depending on your dataset and the characteristics of your data, some methods might work better than others. It’s always essential to experiment with different approaches and evaluate their performance to choose the most suitable one for your specific use case.


Outlier detection is a crucial task in machine learning and data analysis to identify data points that deviate significantly from the norm. Various approaches can be used for outlier detection, each with its own set of advantages, disadvantages, and applications:

  1. Statistical Methods: Simple and intuitive, suitable for normally distributed data. However, they assume specific data distributions and can be sensitive to extreme values. Applications include quality control and financial data analysis.
  2. Distance-based Methods: Robust and versatile, they work well with various data types. Yet, they can be sensitive to data dimensionality and require careful choice of distance metrics. Applications include network anomaly detection and environmental monitoring.
  3. Density-based Methods: Effective for data with varying densities, helpful in capturing local patterns. They are flexible but might be sensitive to parameter choices. Applications include fraud detection and healthcare analytics.
  4. Clustering Methods: Provide an inherent data grouping valid for isolating outliers as unclustered points. However, they require parameter tuning and might not be optimized solely for outlier detection. Applications include image analysis and quality control.
  5. Support Vector Machines (SVM): Effective in high-dimensional spaces, robust to overfitting, and capable of handling global and local patterns. Yet, they can be sensitive to parameter settings and might be computationally intensive. Applications range from fraud detection to image analysis.
  6. Autoencoder Neural Networks: Can capture complex patterns and relationships in data, handle various data types, and perform dimensionality reduction. However, their architecture complexity and training requirements demand careful tuning and regularization. Applications cover image analysis, healthcare, and more.
  7. Isolation Forest: Efficient for high-dimensional data, handles both clustered and isolated outliers. However, it might need careful parameter tuning and could be sensitive to overfitting. Applications span from cybersecurity to healthcare analytics.

Ultimately, the choice of an outlier detection approach depends on the characteristics of your data, the context of your problem, and the trade-offs you’re willing to make between accuracy, interpretability, and computational efficiency. In many cases, combining multiple approaches or employing ensemble techniques can provide more robust results. Experimentation, validation, and domain expertise are crucial for successful outlier detection.

About the Author

Neri Van Otten

Neri Van Otten

Neri Van Otten is the founder of Spot Intelligence, a machine learning engineer with over 12 years of experience specialising in Natural Language Processing (NLP) and deep learning innovation. Dedicated to making your projects succeed.

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