Cross-sectional data records multiple units at or around the same period, often as tabular rows. Although observations share a time window, they may not be independent: relationships among units and group membership can transmit predictive information between features and targets. section 2.1.1
Analyze cross-sectional data with these safeguards:
- Represent meaningful group membership explicitly. For company data, country, operations, and sector can capture relationships that would otherwise remain implicit. section 2.1.1
- Keep related groups on only one side of each validation split when test-set group labels or relationships must not be shared with training data. section 2.1.1
- Do not automatically treat rows as IID. Shared groups can create autocorrelation and inflate cross-validation estimates when prediction-time relationships differ. section 2.1.1
Figure 2.1 Comparison of IID and non--IID data sequences. The left chart shows IID data, while the right chart illustrates non-IID data, highlighting the sequential correlation patterns.
Compare IID and non-IID sequences to see why apparently similar rows can carry sequential or group-related dependencies. section 2.1.1

