What is a factor?

Introduction to R for Finance

Lore Dirick

Manager of Data Science Curriculum at Flatiron School

Stocks or bonds?

answers <- c("stock", "bond", "bond", "stock")
investment <- factor(answers)
investment

stock bond  bond  stock
Levels: bond stock

class(investment)

"factor"

as.integer(investment)

2 1 1 2

levels(investment)

"bond"  "stock"

head(ranking)

36 45 32 10 42  8

buckets <- c(0, 10, 20, 30, 40, 50)
ranking_grouped <- cut(ranking, breaks = buckets)
head(ranking_grouped)

(30,40] (40,50] (30,40] (0,10]  (40,50] (0,10] 
Levels: (0,10] (10,20] (20,30] (30,40] (40,50]

Introduction to R for Finance