Generating a density plot

The density plot uses the kernel density estimation to generate the distribution. In this recipe, we will utilize the density() function to generate a plot. The density plots can be used to study the underlying distribution of the data.

Generating a density plot

Getting ready

We will use the quantmod package to download the stock prices for Microsoft and also calculate monthly returns:

install.packages("quantmod")
library(quantmod)

How to do it…

We will download the data in R using the getSymbols() function. Once we have the data, we can calculate the monthly returns using the monthlyReturns() function:

prices = c("MSFT") getSymbols(prices) msft_m = monthlyReturn(MSFT) ...

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