Search icon CANCEL
Subscription
0
Cart icon
Your Cart (0 item)
Close icon
You have no products in your basket yet
Arrow left icon
Explore Products
Best Sellers
New Releases
Books
Videos
Audiobooks
Learning Hub
Free Learning
Arrow right icon
Arrow up icon
GO TO TOP
Learning Quantitative Finance with R

You're reading from   Learning Quantitative Finance with R Implement machine learning, time-series analysis, algorithmic trading and more

Arrow left icon
Product type Paperback
Published in Mar 2017
Publisher Packt
ISBN-13 9781786462411
Length 284 pages
Edition 1st Edition
Languages
Arrow right icon
Authors (2):
Arrow left icon
PRASHANT VATS PRASHANT VATS
Author Profile Icon PRASHANT VATS
PRASHANT VATS
Dr. Param Jeet Dr. Param Jeet
Author Profile Icon Dr. Param Jeet
Dr. Param Jeet
Arrow right icon
View More author details
Toc

Table of Contents (10) Chapters Close

Preface 1. Introduction to R FREE CHAPTER 2. Statistical Modeling 3. Econometric and Wavelet Analysis 4. Time Series Modeling 5. Algorithmic Trading 6. Trading Using Machine Learning 7. Risk Management 8. Optimization 9. Derivative Pricing

K means algorithm


The K means algorithm is an unsupervised machine learning algorithm. Unsupervised learning is another way of classifying the data as it does not require labeling of the data. In reality, there are many instances where labeling of the data is not possible, so we require them to classify data based on unsupervised learning. Unsupervised learning uses the similarity between data elements and assigns each data point to its relevant cluster. Each cluster has a set of data points which are similar in nature. The K means algorithm is the most basic unsupervised learning algorithm and it just requires data to plug into the algorithm along with the number of clusters we would like it to cluster returning the vector of cluster labeling for each data point. I used normalized data along with the number of clusters. I used the in-sample data which was used during logistic regression, to be divided into three clusters.

set.seed() is used to have the same output in every iteration; without...

lock icon The rest of the chapter is locked
Register for a free Packt account to unlock a world of extra content!
A free Packt account unlocks extra newsletters, articles, discounted offers, and much more. Start advancing your knowledge today.
Unlock this book and the full library FREE for 7 days
Get unlimited access to 7000+ expert-authored eBooks and videos courses covering every tech area you can think of
Renews at $19.99/month. Cancel anytime
Banner background image