#### Overview of this book

This cookbook offers a range of data analysis samples in simple and straightforward R code, providing step-by-step resources and time-saving methods to help you solve data problems efficiently. The first section deals with how to create R functions to avoid the unnecessary duplication of code. You will learn how to prepare, process, and perform sophisticated ETL for heterogeneous data sources with R packages. An example of data manipulation is provided, illustrating how to use the “dplyr” and “data.table” packages to efficiently process larger data structures. We also focus on “ggplot2” and show you how to create advanced figures for data exploration. In addition, you will learn how to build an interactive report using the “ggvis” package. Later chapters offer insight into time series analysis on financial data, while there is detailed information on the hot topic of machine learning, including data classification, regression, clustering, association rule mining, and dimension reduction. By the end of this book, you will understand how to resolve issues and will be able to comfortably offer solutions to problems encountered while performing data analysis.
R for Data Science Cookbook
Credits
www.PacktPub.com
Preface
Free Chapter
Functions in R
Data Preprocessing and Preparation
Visualizing Data with ggplot2
Making Interactive Reports
Simulation from Probability Distributions
Statistical Inference in R
Time Series Mining with R
Index

## Simulating the stochastic process

The stochastic process, also known as the random process, illustrates the evolution of the system of random values over time. It is the best to use when one or more variables within the model are random. In this recipe, we will introduce how to simulate a random stock trading process with R.

In this recipe, you need to prepare your environment with R installed and a computer that can access the Internet. You should complete the previous step and have `quantmod` or DJI data loaded in an R session.

### How to do it…

```> DJI.2014 = DJI['2014']
2. We can then use the sample function to generate samples of `0` and `1`:
```> set.seed(123)
3. Next, we subset the DJI close price with the index equal to `1` only, which denotes that we either buy or sell stock on that day:
`> stock...`