Publications by Learning Machines
“You Are Here”: Understanding How GPS Works
Last week, I showed you a method of how to find the fastest path from A to B: Finding the shortest Path with Dijkstra’s Agorithm. To make use of that, we need a method to determine our position at any point in time. For that matter, many devices use the so-called Global Positioning System (GPS). If you want to understand how it works and do som...
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The Central Limit Theorem (CLT): From Perfect Symmetry to the Normal Distribution
How can the Normal Distribution arise out of a completely symmetric set-up? The so-called Central Limit Theorem (CLT) is a fascinating example that demonstrates such behaviour. If you want to get some intuition on what lies at the core of many statistical tests, read on! The Central Limit Theorem (CLT) states: The sum (or the average = scaled s...
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Financial Engineering: Static Replication of any Payoff Function
In the area of option strategy trading, it has always been a dream of mine to have a universal tool that is able to replicate any payoff function statically by combining plain vanilla products like calls, puts, and zerobonds. Many years ago there was such a tool online but it has long gone since and the domain is inactive. So, based on the old pr...
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Financial Engineering: Static Replication of any Payoff Function
In the area of option strategy trading, it has always been a dream of mine to have a universal tool that is able to replicate any payoff function statically by combining plain vanilla products like calls, puts, and zerobonds. Many years ago there was such a tool online but it has long gone since and the domain is inactive. So, based on the old pr...
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Create Bart Simpson Blackboard Memes with R
Everybody knows the Simpsons, everybody loves the Simpsons and everybody can laugh about Bart Simpson writing funny lines on the blackboard! If you want to create your own Bart Simpson Blackboard Meme Generator with R read on! Conveniently enough there is a package for creating memes already (who would have thought otherwise, because there is a ...
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How to Catch a Thief: Unmasking Madoff’s Ponzi Scheme with Benford’s Law
One of my starting points into quantitive finance was Bernie Madoff’s fund. Back then because Bernie was in desperate need of money to keep his Ponzi scheme running there existed several so-called feeder funds. One of them happened to approach me to offer me a once in a lifetime investment opportunity. Or so it seemed. Now, there is this old s...
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xkcd Comics as a Minimal Example for Calling APIs, Downloading Files and Displaying PNG Images with R
xkcd webcomics is one of the institutions of the internet, especially for the nerd community. If you want to learn how to fetch JSON data from a REST API, download a file from the internet and display a PNG file in a ultra-simple example, read on! Many services on the internet provide a web service so that it is easier for machines to get access...
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Logistic Regression as the Smallest Possible Neural Network
We already covered Neural Networks and Logistic Regression in this blog. If you want to gain an even deeper understanding of the fascinating connection between those two popular machine learning techniques read on! Let us recap what an artificial neuron looks like: Mathematically it is some kind of non-linear activation function of the scalar p...
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OneR in Medical Research: Finding Leading Symptoms, Main Predictors and Cut-Off Points
We already had a lot of examples that make use of the OneR package (on CRAN), which can be found in the respective Category: OneR. Here we will give you some concrete examples in the area of research on Type 2 Diabetes Mellitus (DM) to show that the package is especially well suited in the field of medical research, so read on! One of the big ad...
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COVID-19 vaccine “95% effective”: It doesn’t mean what you think it means!
COVID-19 has the world more than ever in its grip – but there is hope: several vaccines have been developed which promise to deliver “95% efficacy”. When people read this many assume that it means that 95% of vaccinated persons will be protected from infection – but that is not true. Even many (science) journalists get it wrong! If you wa...
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