08 August 2018 7 7K Report

I have a set a={x1,x2,x3}, b={y1,y2,y3} and c={z1,z2,z3}. X are financial variables from my dataset, Y and Z are financial variables from other dataset. Each value is in thousand dollar. I want to find which set (set b or set c) is closer to set a. So, I used the euclidean distance. But, the resulted distance is too big because the difference between value is thousand of dollar. Hence, I divided each distance with the mean of set a to make it smaller with range of 0-1:

Distance (b,a) = euclidean(b,a)/mean(a)

Distance (c,a) = euclidean(c,a)/mean(a)

I'm not sure if this is mathematically correct or not. Is there any better way?

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