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Hands-On Machine Learning for Algorithmic Trading

You're reading from   Hands-On Machine Learning for Algorithmic Trading Design and implement investment strategies based on smart algorithms that learn from data using Python

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Product type Paperback
Published in Dec 2018
Publisher Packt
ISBN-13 9781789346411
Length 684 pages
Edition 1st Edition
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Authors (2):
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Jeffrey Yau Jeffrey Yau
Author Profile Icon Jeffrey Yau
Jeffrey Yau
Stefan Jansen Stefan Jansen
Author Profile Icon Stefan Jansen
Stefan Jansen
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Table of Contents (23) Chapters Close

Preface 1. Machine Learning for Trading FREE CHAPTER 2. Market and Fundamental Data 3. Alternative Data for Finance 4. Alpha Factor Research 5. Strategy Evaluation 6. The Machine Learning Process 7. Linear Models 8. Time Series Models 9. Bayesian Machine Learning 10. Decision Trees and Random Forests 11. Gradient Boosting Machines 12. Unsupervised Learning 13. Working with Text Data 14. Topic Modeling 15. Word Embeddings 16. Deep Learning 17. Convolutional Neural Networks 18. Recurrent Neural Networks 19. Autoencoders and Generative Adversarial Nets 20. Reinforcement Learning 21. Next Steps 22. Other Books You May Enjoy

How word embeddings encode semantics

The bag-of-words model represents documents as vectors that reflect the tokens they contain. Word embeddings represent tokens as lower dimensional vectors so that their relative location reflects their relationship in terms of how they are used in context. They embody the distributional hypothesis from linguistics that claims words are best defined by the company they keep.

Word vectors are capable of capturing numerous semantic aspects; not only are synonyms close to each other, but words can have multiple degrees of similarity, for example, the word driver could be similar to motorist or to cause. Furthermore, embeddings reflect relationships among pairs of words such as analogies (Tokyo is to Japan what Paris is to France, or went is to go what saw is to see) as we will illustrate later in this section.

Embeddings result from training a...

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