Research on Prediction and Analysis of Shanghai Stock Index Based on the ARIMA Model

Abstract

This study aims to analyze the future trends of the Shanghai Composite Index (SSE Composite Index), a primary stock index on the Shanghai Stock Exchange (SSE). The SSE Composite Index not only serves as a crucial indicator of the Chinese capital market but also attracts global attention as a focal point in financial markets worldwide. Its fluctuations have broad impacts, influencing decisions of investors and the global economic environment. Due to the increasing limitations of traditional forecasting methods such as moving averages and exponential smoothing in the face of the complexity and uncertainty of financial markets, this paper chooses to employ the Autoregressive Integrated Moving Average (ARIMA) model for more accurate and sophisticated predictions. The paper provides a literature review to outline relevant studies, delves into the specific processes of data preprocessing and model establishment, and concludes with empirical analysis and result discussions. The study suggests that the ARIMA model remains effective and feasible in predicting the SSE Composite Index.