Residual plots are a model evaluation technique that can be used to understand whether a regression model is more frequently overestimating or underestimating the target. Residual plots are graphs that plot the residuals (the difference between the actual and predicted values) against the predicted values or other variables. Residual plots can help the Machine Learning Specialist to identify the patterns and trends in the residuals, such as the direction, shape, and distribution. Residual plots can also reveal the presence of outliers, heteroscedasticity, non-linearity, or other problems in the model12

To determine whether the model is overestimating or underestimating the target, the Machine Learning Specialist can use a residual plot that plots the residuals against the predicted values. This type of residual plot is also known as a prediction error plot. A prediction error plot can show the magnitude and direction of the errors made by the model. If the model is overestimating the target, the residuals will be negative, and the points will be below the zero line. If the model is underestimating the target, the residuals will be positive, and the points will be above the zero line. If the model is accurate, the residuals will be close to zero, and the points will be scattered around the zero line. A prediction error plot can also show the variance and bias of the model. If the model has high variance, the residuals will have a large spread, and the points will be far from the zero line. If the model has high bias, the residuals will have a systematic pattern, such as a curve or a slope, and the points will not be randomly distributed around the zero line. A prediction error plot can help the Machine Learning Specialist to optimize the model by adjusting the complexity, features, or parameters of the model34

The other options are not valid or suitable for determining whether the model is overestimating or underestimating the target. Root Mean Square Error (RMSE) is a model evaluation metric that measures the average magnitude of the errors made by the model. RMSE is the square root of the mean of the squared residuals. RMSE can indicate the overall accuracy and performance of the model, but it cannot show the direction or distribution of the errors. RMSE can also be influenced by outliers or extreme values, and it may not be comparable across different models or datasets5 Area under the curve (AUC) is a model evaluation metric that measures the ability of the model to distinguish between the positive and negative classes. AUC is the area under the receiver operating characteristic (ROC) curve, which plots the true positive rate against the false positive rate for various classification thresholds. AUC can indicate the overall quality and performance of the model, but it is only applicable for binary classification models, not regression models. AUC cannot show the magnitude or direction of the errors made by the model. Confusion matrix is a model evaluation technique that summarizes the number of correct and incorrect predictions made by the model for each class. A confusion matrix is a table that shows the counts of true positives, false positives, true negatives, and false negatives for each class. A confusion matrix can indicate the accuracy, precision, recall, and F1-score of the model for each class, but it is only applicable for classification models, not regression models. A confusion matrix cannot show the magnitude or direction of the errors made by the model.