Reader small image

You're reading from  Machine Learning for Algorithmic Trading - Second Edition

Product typeBook
Published inJul 2020
Reading LevelIntermediate
PublisherPackt
ISBN-139781839217715
Edition2nd Edition
Languages
Right arrow
Author (1)
Stefan Jansen
Stefan Jansen
author image
Stefan Jansen

Stefan is the founder and CEO of Applied AI. He advises Fortune 500 companies, investment firms, and startups across industries on data & AI strategy, building data science teams, and developing end-to-end machine learning solutions for a broad range of business problems. Before his current venture, he was a partner and managing director at an international investment firm, where he built the predictive analytics and investment research practice. He was also a senior executive at a global fintech company with operations in 15 markets, advised Central Banks in emerging markets, and consulted for the World Bank. He holds Master's degrees in Computer Science from Georgia Tech and in Economics from Harvard and Free University Berlin, and a CFA Charter. He has worked in six languages across Europe, Asia, and the Americas and taught data science at Datacamp and General Assembly.
Read more about Stefan Jansen

Right arrow

Counting tokens – the document-term matrix

In this section, we first introduce how the bag-of-words model converts text data into a numeric vector space representations. The goal is to approximate document similarity by their distance in that space. We then proceed to illustrate how to create a document-term matrix using the sklearn library.

The bag-of-words model

The bag-of-words model represents a document based on the frequency of the terms or tokens it contains. Each document becomes a vector with one entry for each token in the vocabulary that reflects the token's relevance to the document.

Creating the document-term matrix

The document-term matrix is straightforward to compute given the vocabulary. However, it is also a crude simplification because it abstracts from word order and grammatical relationships. Nonetheless, it often achieves good results in text classification quickly and, thus, provides a very useful starting point.

The...

lock icon
The rest of the page is locked
Previous PageNext Page
You have been reading a chapter from
Machine Learning for Algorithmic Trading - Second Edition
Published in: Jul 2020Publisher: PacktISBN-13: 9781839217715

Author (1)

author image
Stefan Jansen

Stefan is the founder and CEO of Applied AI. He advises Fortune 500 companies, investment firms, and startups across industries on data & AI strategy, building data science teams, and developing end-to-end machine learning solutions for a broad range of business problems. Before his current venture, he was a partner and managing director at an international investment firm, where he built the predictive analytics and investment research practice. He was also a senior executive at a global fintech company with operations in 15 markets, advised Central Banks in emerging markets, and consulted for the World Bank. He holds Master's degrees in Computer Science from Georgia Tech and in Economics from Harvard and Free University Berlin, and a CFA Charter. He has worked in six languages across Europe, Asia, and the Americas and taught data science at Datacamp and General Assembly.
Read more about Stefan Jansen