Publications by Learning Machines
Learning R: Christmas Coding Challenge
In this year’s end post I will give you a little programming challenge! Everybody knows the Christmas song “The Twelve Days of Christmas”! Your task is to write an R script that creates the lyrics! The lyrics are the following: On the first day of Christmas My true love gave to me: A partridge in a pear tree. On the second day of Christmas...
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Why Gradient Descent Works (and How To Animate 3D-Functions in R)
The workhorse of Machine Learning is Gradient Descent. If you want to understand how and why it works and, along the way, want to learn how to plot and animate 3D-functions in R read on! Gradient Descent is a mathematical algorithm to optimize functions, i.e. finding their minima or maxima. In Machine Learning it is used to minimize the cost fun...
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Create Return Triangle Plots with R
How lucrative stocks are in the long run is not only dependent on the length of the investment period but even more on the actual date the investment starts and ends! Return Triangle Plots are a great way to visualize this phenomenon. If you want to learn more about them and how to create them with R read on! If you had invested in the Standard ...
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ELIZA Chatbot in R: Build Yourself a Shrink
More and more companies use chatbots for engaging with their customers. Often the underlying technology is not too sophisticated, yet many people are stunned at how human-like those bots can appear. The earliest example of this was an early natural language processing (NLP) computer program called Eliza created 1966 at the MIT Artificial Intellig...
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R Coding Challenge: How many Lockers are Open?
The German news magazine DER SPIEGEL has a regular puzzle section in its online version, called “Rätsel der Woche” (“Riddle of the Week”). Some of those puzzles are quite interesting but I am often too lazy to solve them analytically. So I often kill two birds with one stone: having fun solving the puzzle with R and creating some new tea...
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How to be Successful! The Role of Risk-taking: A Simulation Study
When you ask successful people for their advice on how to become successful you will often hear that you have to take risks, often huge risks. In this post we will examine whether this is good advice with a simple multi-agent simulation, so read on! The following quotes from Dan Pierce are only two examples of a wealth of similar advice: I am no...
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Cupid’s Arrow: How to Boost your Chances at Speed Dating!
During our little break, Valentine’s Day was celebrated. Yet for many, it was a depressing day because they are single and are looking for love. Speed dating is a popular format (in times of Covid-19 also in virtual form) to meet many different potential soul mates in a short period of time. If you want to learn which factors determine “getti...
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Pseudo-Randomness: Creating Fake Noise
In data science, we try to find, sometimes well-hidden, patterns (= signal) in often seemingly random data (= noise). Pseudo-Random Number Generators (PRNG) try to do the opposite: hiding a deterministic data generating process (= signal) by making it look like randomness (= noise). If you want to understand some basics behind the scenes of this ...
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Parrondo’s Paradox in Finance: Combine two Losing Investments into a Winner
Wikipedia defines Parrondo’s paradox in game theory as A combination of losing strategies becomes a winning strategy. If you want to learn more about this fascinating topic and see an application in finance, read on! Please have a look at this wonderful little video by my colleague Professor Humberto Barreto from DePauw University, Indiana, b...
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Backtesting Options Strategies with R
We have already covered the backtesting of trading strategies in this blog (see Backtest Trading Strategies Like a Real Quant), so let us up the ante: if you want to learn how to backtest options strategies, read on! Options trading strategies are strategies where you combine, often several, derivatives instruments to create a certain risk-retur...
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