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Machine Learning for Finance

You're reading from   Machine Learning for Finance Principles and practice for financial insiders

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Product type Paperback
Published in May 2019
Publisher Packt
ISBN-13 9781789136364
Length 456 pages
Edition 1st Edition
Languages
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Authors (2):
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Jannes Klaas Jannes Klaas
Author Profile Icon Jannes Klaas
Jannes Klaas
James Le James Le
Author Profile Icon James Le
James Le
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Table of Contents (15) Chapters Close

Machine Learning for Finance
Contributors
Preface
Other Books You May Enjoy
1. Neural Networks and Gradient-Based Optimization 2. Applying Machine Learning to Structured Data FREE CHAPTER 3. Utilizing Computer Vision 4. Understanding Time Series 5. Parsing Textual Data with Natural Language Processing 6. Using Generative Models 7. Reinforcement Learning for Financial Markets 8. Privacy, Debugging, and Launching Your Products 9. Fighting Bias 10. Bayesian Inference and Probabilistic Programming Index

Bag-of-words


A simple yet effective way of classifying text is to see the text as a bag-of-words. This means that we do not care for the order in which words appear in the text, instead we only care about which words appear in the text.

One of the ways of doing a bag-of-words classification is by simply counting the occurrences of different words from within a text. This is done with a so-called count vector. Each word has an index, and for each text, the value of the count vector at that index is the number of occurrences of the word that belong to the index.

Picture this as an example: the count vector for the text "I see cats and dogs and elephants" could look like this:

i

see

cats

and

dogs

elephants

1

1

1

2

1

1

In reality, count vectors are pretty sparse. There are about 23,000 different words in our text corpus, so it makes sense to limit the number of words we want to include in our count vectors. This could mean excluding words that are often just gibberish or typos with...

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