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Learning Quantitative Finance with R

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

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Product type Paperback
Published in Mar 2017
Publisher Packt
ISBN-13 9781786462411
Length 284 pages
Edition 1st Edition
Languages
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Authors (2):
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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
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Toc

Table of Contents (10) Chapters Close

Preface 1. Introduction to R 2. Statistical Modeling FREE CHAPTER 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

Random forest


Random forest is one of the best tree-based methods. Random forest is an ensemble of decision trees and each decision tree has certain weights associated with it. A decision of the random forest is decided like voting, as the majority of decision tree outcomes decide the outcome of the random forest. So we start using the randomForest package and this can be installed and loaded using the following commands:

>install.packages("randomForest")
>library(randomForest)

We can also use the following command to know more about this randomForest package, including version, date of release, URL, set of functions implemented in this package, and much more:

>library(help=randomForest)

Random forest works best for any type of problem and handles classification, regression, and unsupervised problems quite well. Depending upon the type of labeled variable, it will implement relevant decision trees; for example, it uses classification for factor target variables, regression for numeric...

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