Histogram of returns

A simple chart of returns does not reveal much about the time series properties; often, data must be displayed in a different format to visualize interesting features.

The density function, represented by the histogram of returns, indicates the most common returns in a time series without taking time into account. In R, these are calculated with the hist() and density() functions.

In the video, you saw how to create a histogram with 20 buckets, a title, and no Y axis label:

> hist(amazon_stocks,
       breaks = 20,
       main = "AMAZON return distribution",
       xlab = "")

Recall that you can use the lines() function to add a new time series, even with different line properties like color and thickness, to an existing plot.

In this exercise, you will create a histogram of the Apple daily returns data for the last two years contained in rtn.

Instructions

Draw the histogram of rtn titled "Apple stock return distribution" and with probability = TRUE to scale the histogram to a probability density
Add a new line to the plot showing the density of rtn
Redraw the density line with twice the default width and a red color

Take Hint (-30xp)