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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
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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

Word embeddings


The order of words in a text matters. Therefore, we can expect higher performance if we do not just look at texts in aggregate but see them as a sequence. This section makes use of a lot of the techniques discussed in the previous chapter; however, here we're going to add a critical ingredient, word vectors.

Words and word tokens are categorical features. As such, we cannot directly feed them into a neural network. Previously, we have dealt with categorical data by turning it into one-hot encoded vectors. Yet for words, this is impractical. Since our vocabulary is 10,000 words, each vector would contain 10,000 numbers that are all zeros except for one. This is highly inefficient, so instead, we will use an embedding.

In practice, embeddings work like a lookup table. For each token, they store a vector. When the token is given to the embedding layer, it returns the vector for that token and passes it through the neural network. As the network trains, the embeddings get optimized...

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