Book Image

Practical Data Science Cookbook, Second Edition - Second Edition

By : Prabhanjan Narayanachar Tattar, Bhushan Purushottam Joshi, Sean Patrick Murphy, ABHIJIT DASGUPTA, Anthony Ojeda
Book Image

Practical Data Science Cookbook, Second Edition - Second Edition

By: Prabhanjan Narayanachar Tattar, Bhushan Purushottam Joshi, Sean Patrick Murphy, ABHIJIT DASGUPTA, Anthony Ojeda

Overview of this book

As increasing amounts of data are generated each year, the need to analyze and create value out of it is more important than ever. Companies that know what to do with their data and how to do it well will have a competitive advantage over companies that don’t. Because of this, there will be an increasing demand for people that possess both the analytical and technical abilities to extract valuable insights from data and create valuable solutions that put those insights to use. Starting with the basics, this book covers how to set up your numerical programming environment, introduces you to the data science pipeline, and guides you through several data projects in a step-by-step format. By sequentially working through the steps in each chapter, you will quickly familiarize yourself with the process and learn how to apply it to a variety of situations with examples using the two most popular programming languages for data analysis—R and Python.
Table of Contents (17 chapters)
Title Page
Credits
About the Authors
About the Reviewer
www.PacktPub.com
Preface

Generating relative valuations


One of the most interesting things that you can do with stock market data is come up with a valuation model. The ultimate goal is to arrive at a decision about whether the stock might be overvalued or undervalued. There are two main ways to do this. Intrinsic valuation is generally more time consuming because it involves digging into the financial statements of a company to arrive at a valuation decision. The alternative method is relative valuation which will quickly provide a sense of how the stock is valued, but does not take into account a comprehensive set of factors. The basic idea is that it compares a stock's price and valuation ratios to similar stocks to arrive at a conclusion. In this section, we will value stocks using the simpler relative valuation method.

Getting ready

This recipe requires the data downloaded and cleaned in the previous recipes.

How to do

We will essentially do three major things in this section. First, we calculate sector averages...