Empirical Methods in Finance

Practicing 2

Henrique C. Martins

Graphs

Scatterplot

library(ggplot2)
library(ggthemes)
iris <- iris 

ggplot(iris, aes(x=Sepal.Length, y=Sepal.Width, color=Species)) + 
    geom_point(size =2) +   theme_solarized() + 
        labs(title ="My title",
             subtitle = "My subtitle",
             caption = "An explanation about the graph",
             x = "My title for the x-axis (suggestion: Sepal Length)",
             y = "Sepal Width")

Scatterplot

The same thing with a different pair of variables, but now I am including the linear relationship between the variables.

ggplot(iris, aes(x=Petal.Length, y=Petal.Width)) + 
    geom_point(size =2) +   theme_solarized() +
   geom_point(aes(color = Species))+
   geom_smooth(method='lm')

Scatterplot

I could include a linear relationship by group. In all cases, we observe a positive relationship between the variables, but the relationship seens stonger in versicolor.

ggplot(iris, aes(x=Petal.Length, y=Petal.Width, color = Species)) + 
    geom_point(size =2) +   theme_solarized() +
   geom_point(aes(color = Species))+
   geom_smooth(method='lm')

Boxplot

I could also create boxplots using the iris dataset. Notice there is one observation with very low Length in the virginica group.

ggplot(iris, aes(Species, Sepal.Length, fill=Species)) + 
  geom_boxplot()+ theme_solarized() + 
  scale_y_continuous(breaks= seq(0,30, by=.5))

Density plots

Here is a nice-looking density plot.

 ggplot(iris, aes(x=Petal.Length, colour=Species, fill=Species)) +
  geom_density(alpha=.3) + theme_solarized()

THANK YOU!

QUESTIONS?

Henrique C. Martins