Stock Market Prediction Research Articles

Predicting the Direction of NEPSE Index Movement with News Headlines Using Machine Learning

Predicting stock market movement direction is a challenging task due to its fuzzy, chaotic, volatile, nonlinear, and complex nature. However, with advancements in artificial intelligence, abundant data availability, and improved computational capabilities, creating robust models capable of accurately predicting stock market movement is now feasible. This study aims to construct a predictive model using news headlines to predict stock market movement direction. It conducts a comparative analysis of five supervised classification machine learning algorithms—logistic regression (LR), support vector machine (SVM), random forest (RF), extreme gradient boosting (XGBoost), and artificial neural network (ANN)—to predict the next day’s movement direction of the close price of the Nepal Stock Exchange (NEPSE) index. Sentiment scores from news headlines are computed using the Valence Aware Dictionary for Sentiment Reasoning (VADER) and TextBlob sentiment analyzer. The models’ performance is evaluated based on sensitivity, specificity, accuracy, and the area under the receiver operating characteristic (ROC) curve (AUC). Experimental results reveal that all five models perform equally well when using sentiment scores from the TextBlob analyzer. Similarly, all models exhibit almost identical performance when using sentiment scores from the VADER analyzer, except for minor variations in AUC in SVM vs. LR and SVM vs. ANN. Moreover, models perform relatively better when using sentiment scores from the TextBlob analyzer compared to the VADER analyzer. These findings are further validated through statistical tests.

Support vector machine-based stock market prediction using long short-term memory and convolutional neural network with aquila circle inspired optimization

ABSTRACT Predicting the stock market is one of the significant chores and has a successful prediction of stock rates, and it helps in making correct decisions. The prediction of the stock market is the main challenge due to blaring, chaotic data as well as non-stationary data. In this research, the support vector machine (SVM) is devised for performing an effective stock market prediction. At first, the input time series data is considered and the pre-processing of data is done by employing a standard scalar. Then, the time intrinsic features are extracted and the suitable features are selected in the feature selection stage by eliminating other features using recursive feature elimination. Afterwards, the Long Short-Term Memory (LSTM) based prediction is done, wherein LSTM is trained to employ Aquila circle-inspired optimization (ACIO) that is newly introduced by merging Aquila optimizer (AO) with circle-inspired optimization algorithm (CIOA). On the other hand, delay-based matrix formation is conducted by considering input time series data. After that, convolutional neural network (CNN)-based prediction is performed, where CNN is tuned by the same ACIO. Finally, stock market prediction is executed utilizing SVM by fusing the predicted outputs attained from LSTM-based prediction and CNN-based prediction. Furthermore, the SVM attains better outcomes of minimum mean absolute percentage error; (MAPE) and normalized root-mean-square error (RMSE) with values about 0.378 and 0.294.

Real-Time Stock Forecasting: Leveraging Live Data and Advanced Algorithms for Accurate Predictions

This groundbreaking research introduces an innovative stock market prediction methodology that integrates financial modeling, machine learning, and real-time data analysis. Anchored in a deep understanding of stock market dynamics, including economic statistics, company performance, and market sentiment, our approach employs natural language processing (NLP) and predictive modeling to analyze live data for accurate stock price predictions. The method involves collecting and preprocessing a dynamic dataset enriched with financial indicators and historical stock prices. Utilizing Long Short-Term Memory (LSTM) algorithms, our model exhibits an impressive 96% accuracy in forecasting stock movements, showcasing adaptability to diverse market scenarios and responsiveness to economic factors and sentiment shifts. The incorporation of live data proves pivotal in providing timely insights for informed decision-making, establishing our model as a valuable tool for navigating the complexities of the modern financial landscape.

Stock Market Prediction Using Machine Learning Techniques

The stock market is a very important activity in the finance business. Its demand is consistently growing. Stock market prediction is the process of determining the future value of company stock or other financial instruments traded on a financial exchange. For some decades Artificial Neural Network (ANN), which is one intelligent data mining technique has been used for Stock Price Prediction. It has been trusted as the most accurate consideration. This paper surveys different machine learning models for stock price prediction. We have trained the available stockdataofAmericanAirlinesforthisproject.Th eprogramminglanguagethatwe have used in this paper is Python. The Machine Learning (ML) models used in this project are Decision Tree (DT), Support Vector Regression (SVR), Random Forest (RF),and ANN. The datahereissplitinto70%fortrainingand30%fort esting.The dataset contains stock data for the last 5 years. From the simulation results, it is shown that Random Forest performs better as compared to others. Thus, it can be used in the real-time implementation. Keywords Machine Learning, Stock Price, Prediction, American Airlines, Support Vector Machine (SVR), Artificial Neural Network (ANN), Random Forest (RF), Decision Tree (DT).

Stock market prediction employing ensemble methods: the Nifty50 index

<span lang="EN-US">Accurately forecasting stock fluctuations can yield high investment returns while minimizing risk. However, market volatility makes these projections unlikely. As a result, stock market data analysis is significant for research. Analysts and researchers have developed various stock price prediction systems to help investors make informed judgments. Extensive studies show that machine learning can anticipate markets by examining stock data. This article proposed and evaluated different ensemble learning techniques such as max voting, bagging, boosting, and stacking to forecast the Nifty50 index efficiently. In addition, an embedded feature selection is performed to choose an optimal set of fundamental indicators as input to the model, and extensive hyperparameter tuning is applied using grid search to each base regressor to enhance performance. Our findings suggest the bagging and stacking ensemble models with random forest (RF) feature selection offer lower error rates. The bagging and stacking regressor model 2 outperformed all other models with the lowest root mean square error (RMSE) of 0.0084 and 0.0085, respectively, showing a better fit of ensemble regressors. Finally, the findings show that machine learning algorithms can help fundamental analyses make stock investment decisions.</span>

STOCKDIARY: Post-Development Analysis and Performance Evaluation of an Advanced Stock Market Prediction Platform

In the rapidly changing financial landscape, accurate stock market prediction is essential for investors to optimize their portfolios and manage risks effectively. STOCKDIARY is an innovative platform that leverages state-of-the-art technologies like Python, Streamlit, and Jupyter to provide real-time insights and predictions to its users. This paper conducts a thorough post-deployment evaluation of STOCKDIARY focusing processes, user engagement, predictive accuracy, and overall performance. Utilizing sophisticated predictive models trained on extensive historical data, including Linear Regression, Support Vector Regression, and Random Forest, STOCKDIARY delivers timely and precise predictions. Its user-friendly interface, developed with Streamlit, offers intuitive visualization tools, empowering users to analyze market trends effectively. Evaluation metrics such as Mean Squared Error and R-squared values demonstrate the platform’s reliability. Continuous user feedback informs ongoing enhancements, including the integration of advanced analytics and further refinement of the user experience. STOCKDIARY emerges as a valuable tool for investors, providing actionable insights for confident decision-making in today’s complex financial markets.

Stock Market Prediction

The prediction of stock market trends is a challenging yet critical task in the financial sector, given its significant implications for investors, traders, and financial institutions. This research leverages the Long Short-Term Memory (LSTM) algorithm, a type of recurrent neural network (RNN), to develop a robust model for forecasting stock prices. The study utilizes historical stock market data sourced from Yahoo Finance, accessed via the yfinance package in Python. The primary objectives are to preprocess the data, implement the LSTM model, and evaluate its performance against traditional models such as Random Forest and Linear Regression. Data preprocessing involved handling missing values, normalizing the dataset, and transforming it into sequences suitable for LSTM training. The model's architecture includes multiple LSTM layers designed to capture temporal dependencies in the data. The study evaluates the model's performance using metrics such as Mean Squared Error (MSE), Root Mean Squared Error (RMSE), Mean Absolute Error (MAE), and prediction accuracy. Comparative analysis shows that the LSTM model outperforms both Random Forest and Linear Regression models, with lower MSE and RMSE values and higher accuracy in predicting stock prices. This research discovered that LSTM's ability to retain long-term dependencies makes it particularly effective for stock market prediction, where historical trends and patterns significantly influence future prices. The results indicate that the LSTM model provides more reliable and precise predictions, which can enhance decision-making in trading and investment. This research highlights the potential of advanced neural network architectures in financial forecasting, offering a valuable tool for investors aiming to optimize their strategies and mitigate risks. The significance of this study lies in its practical application in the financial industry, demonstrating that machine learning models, particularly LSTM, can substantially improve the accuracy of stock market predictions. Future research could explore the integration of additional features, such as macroeconomic indicators and sentiment analysis, to further enhance model performance. This study underscores the importance of continuous innovation and the adoption of sophisticated algorithms to navigate the complexities of financial markets.

Can commodity prices predict stock market returns? The case of dry bulk shipping companies

We explore the relationship between the returns of 45 dry bulk shipping company stock prices and the main 15 commodities that bulk carriers transport. Using a principal component analysis to reduce the dimensionality of the commodities dataset and a panel methodology, we find that a change in the commodity price principal component would result in a 0.6% change in the returns of the shipping stock prices. Minerals appear to have a stronger impact, as a 1% change in the minerals principal component results in a 1.1% change in the returns. This is mainly due to the fact that minerals account for larger trade volumes in the dry bulk market and they employ mostly bigger vessels, while the price of Brent oil is also an important factor affecting shipping stock prices.

Analytical detection of “ Smart Stock Trading System” utilizing AI-model

In the realm of finance, stock trading stands out as one of the most significant activities. Predicting stock prices involves analyzing available market data to forecast the future value of a particular stock or share. In our research, we developed a machine learning model along with LSTM (Long Short-Term Memory) to predict stock prices. Our model follows the 70:30 principle, allowing the model to improve its accuracy over time. We collected a decade's worth of data from Yahoo Finance and employed customized feature engineering and deep learning techniques to analyze the stock market trends. Our approach has shown promising accuracy in predicting stock market trends. By carefully optimizing prediction term lengths, feature engineering methods, and data preprocessing techniques, our work contributes to advancing research in both financial analysis and technical modeling within the stock market domain. Keywords— LSTM, Machine learning, RNN, Data Prediction, finance, linear regression.

Discovering Untapped Potential in Finance Markets Using NLP-Driven Sentiment Analysis

Objectives: The main objective in Sentiment Analysis, and financial data is to decode sentiments through the use of Natural Language Processing (NLP) and Machine Learning (ML). This provides insights into market trends that are essential for risk management and well-informed financial decisions. By removing emotion from financial writing, gives stakeholders practical advice for wise investments in dynamic markets. The main objective is to increase the accuracy of Multinomial Naïve Bayes (Multinomial NB). In this work, we used purely ML models to get the accuracy more than the previous works, which got 74%, and in this work, we can see the accuracy increased to approximately 82%. Methods: This specific Research Work employs Machine Learning approaches to extract sentiment polarity (positive, negative, and neutral) from financial text data. The used ML models are- Multinomial Naïve Bayes (Multinomial NB), Logistic Regression (LR), KNeighbors, Decision Tree, and Random Forest algorithms are used for Sentiment Analysis. Findings: Studies conducted in the financial sector have shown that sentiment and informational substance in stock news have a big impact on market factors such as trading volume, volatility, stock prices, and corporate earnings. This study involves approximately 6000 newspaper articles to extract the polarity from financial text data. The incorporation of Multinomial NB of Natural Language Processing techniques results in a marginal improvement in the sentiment classification model performance among all the models used, where the previous works got the lowest accuracy of 74%. Novelty: This research introduces advanced ML models for extracting financial sentiment from text, including Random Forest, LR, KNeighbors, Decision Tree, and Multinomial NB previously unexplored in similar studies. Notably, the Multinomial NB model accuracy rose significantly from 65% to 82%. The study also presents sentiment segregation (positive, negative, neutral) visualized in a donut chart. Keywords: Sentiment Analysis, Machine Learning, Natural Language Processing, Financial data, Stock market prediction

A Hybrid Multi-population Optimization Algorithm for Global Optimization and Its Application on Stock Market Prediction

A Hybrid Multi-population Optimization Algorithm for Global Optimization and Its Application on Stock Market Prediction

Heteroscedasticity effects as component to future stock market predictions using RNN-based models.

Heteroscedasticity effects are useful for forecasting future stock return volatility. Stock volatility forecasting provides business insight into the stock market, making it valuable information for investors and traders. Predicting stock volatility is a crucial task and challenging. This study proposes a hybrid model that predicts future stock volatility values by considering the heteroscedasticity element of the stock price. The proposed model is a combination of Generalized Autoregressive Conditional Heteroskedasticity (GARCH) and a well-known Recurrent Neural Network (RNN) algorithm Long Short-Term Memory (LSTM). This proposed model is referred to as GARCH-LSTM model. The proposed model is expected to improve prediction accuracy by considering heteroscedasticity elements. First, the GARCH model is employed to estimate the model parameters. After that, the ARCH effect test is used to test the residuals obtained from the model. Any untrained heteroscedasticity element must be found using this step. The hypothesis of the ARCH test yielded a p-value less than 0.05 indicating there is valuable information remaining in the residual, known as heteroscedasticity element. Next, the dataset with heteroscedasticity is then modelled using an LSTM-based RNN algorithm. Experimental results revealed that hybrid GARCH-LSTM had the lowest MAE (7.961), RMSE (10.466), MAPE (0.516) and HMAE (0.005) values compared with a single LSTM. The accuracy of forecasting was also significantly improved by 15% and 13% with hybrid GARCH-LSTM in comparison to single LSTMs. Furthermore, the results reveal that hybrid GARCH-LSTM fully exploits the heteroscedasticity element, which is not captured by the GARCH model estimation, outperforming GARCH models on their own. This finding from this study confirmed that hybrid GARCH-LSTM models are effective forecasting tools for predicting stock price movements. In addition, the proposed model can assist investors in making informed decisions regarding stock prices since it is capable of closely predicting and imitating the observed pattern and trend of KLSE stock prices.

Stock Price Prediction Using Machine Learning

This project’s Researchers have been studying different methods to effectively predict the stock market price. Useful prediction systems allow traders to get better insights about data such as: future trends. Also, investors have a major benefit since the analysis give future conditions of the market. One such method is to use machine learning algorithms for forecasting. A number of researchers have come up with various ways to solve this problem, mainly there are traditional methods so far, such as artificial neural network is a way to get hidden patterns and classify the data which is used in predicting stock market. This project proposes a different method for prognosing stock market prices. It does not fit the data to a specific model; rather we are identifying the latent dynamics existing in the data using machine learning architectures. In this work we use Machine learning architectures Long Short-Term Memory (LSTM), Convolutional Neural Network (CNN) and Hybrid approach of LSTM + CNN for the price forecasting of NSE listed companies and differentiating their performance. On a long term basis, sling window approach has been applied and the performance was assessed by using root mean square error.

Development of Context-Based Sentiment Classification for Intelligent Stock Market Prediction

Development of Context-Based Sentiment Classification for Intelligent Stock Market Prediction

Correlation Between News and Stock Price Based on Stock Market Indices: Can News Classification Be Used as a Tool to Make Better Decisions?

The stock market is influenced by various factors, including news events, economic indicators, and investor sentiment. Understanding the correlation between news and stock price movements interests market participants and researchers. In this paper, we explore the relationship between news sentiment and stock market trends using stock market indices. We employ natural language processing (NLP) techniques to classify news articles and analyze their impact on stock market indices, focusing on the S&P 500 and the Dow Jones Industrial Average. We utilize sentiment analysis and machine learning algorithms, including Random Forest, Loughran-McDonald (2014) Financial Sentiment Word Lists (Extended), and AFINN Lexicon, to predict stock market trends based on news sentiment. Our findings demonstrate that positive news sentiment has a more significant impact on stock prices than negative sentiment. The Random Forest model achieves the highest accuracy, while domain-specific lexicons provide valuable insights into financial news sentiment. However, predicting negative trends remains a challenge across all methods. Our research contributes to the growing knowledge of the relationship between news and stock prices and provides valuable insights for market participants and researchers.

Stock Market and Cryptocurrency Price Prediction

Stock Market and Cryptocurrency Price Prediction

Strategic Selection of Machine Learning Models for Short-term Trading Optimization

Stock market prediction is a key aspect for a financial analyst and investor, as it facilitates better decisions and improved investment strategies. Towards this end, this project compares how machine learning (ML) models perform in predicting stock market prices with relatively small dataset sizes so as to get the best performing one. This study evaluates the efficiency and accuracy of artificial neural networks, support vector regression, LSTM and decision trees in capturing market trends and forecasting stock movements. The importance of our proposed paper lies in its potential to demystify the complexities of financial markets for students and new entrants in the field of finance. Participants can garner practical insights on how the stock market operates and the application of theoretical ML concepts to financial analytics by identifying the best-performing ML models with limited datasets, which is a common occurrence in real-life situations. This paper aims to analyse the commonly present machine learning models in stock market prediction and choose the most effective model depending upon their performance, which is achieved using limited information (short term data). This would provide an edge in taking small (less-risky) informed financial decisions without extensive study of the stock market.

Certainty of uncertainty for asset pricing

Uncertainty is known to be crucial in asset pricing, yet evidence from a comprehensive analysis of various uncertainty measures remains sparse. By machine learning, we construct a novel economic uncertainty index derived from a heterogeneous range of uncertainty measures and investigate its predictability of stock returns. Our composite uncertainty index exhibits robust in- and out-of-sample predictability of stock market returns over the one- to 12-month horizon. The predictive power stems from the volatility-orthogonal components of individual uncertainty measures and becomes more pronounced during high uncertainty and high sentiment periods. The predictability of our economic uncertainty index aligns with theoretical frameworks linking uncertainty to future investment, cash flows, and market expectations.

Advancing Stock Market Predictions with Time Series Analysis including LSTM and ARIMA

Predicting stock market prices accurately is a major task for investors and traders seeking to optimize their decision-making processes. This research focuses on the comparative analysis of advanced machine learning (ML) techniques, particularly, the Long Short-Term Memory (LSTM) model and Autoregressive Integrated Moving Average (ARIMA) model for predicting stock market prices. The study enforces thorough data collection and preprocessing to ensure the quality and reliability of the historical stock price data, forming a robust foundation for the predictive models. The core contribution of this paper lies in its systematic and comparative analysis of these two models. A range of performance metrics, including Mean Absolute Error (MAE) and Root Mean Square Error (RMSE), are employed to assess and contrast the predictive accuracy and efficiency of the LSTM and ARIMA models. The research findings indicate that the ARIMA model, contrary to expectations, outperforms the LSTM model in this study, achieving lower RMSE and MAE values. Specifically, the ARIMA model demonstrates a Test RMSE of 4.336 and a Test MAE of 3.45926, indicating its superior predictive accuracy compared to the LSTM model. Furthermore, the study sets its findings against the backdrop of existing literature by comparing the performance of its models with those reported in previous research. This comparison shows better results achieved by our stock market prediction models. By addressing limitations observed in prior studies and demonstrating practical applicability, this research contributes to advancing stock market prediction methodologies, offering valuable insights for investors and traders.

MLP and RBF Algorithms in Finance: Predicting and Classifying Stock Prices amidst Economic Policy Uncertainty

In the realm of stock market prediction and classification, the use of machine learning algorithms has gained significant attention. In this study, we explore the application of Multilayer Perceptron (MLP) and Radial Basis Function (RBF) algorithms in predicting and classifying stock prices, specifically amidst economic policy uncertainty. Stock market fluctuations are greatly influenced by economic policies implemented by governments and central banks. These policies can create uncertainty and volatility, which in turn makes accurate predictions and classifications of stock prices more challenging. By leveraging MLP and RBF algorithms, we aim to develop models that can effectively navigate these uncertainties and provide valuable insights to investors and financial analysts. The MLP algorithm, based on artificial neural networks, is able to learn complex patterns and relationships within financial data. The RBF algorithm, on the other hand, utilizes radial basis functions to capture non-linear relationships and identify hidden patterns within the data. By combining these algorithms, we aim to enhance the accuracy of stock price prediction and classification models. The results showed that both MLB and RBF predicted stock prices well for a group of countries using an index reflecting the impact of news on economic policy and expectations, where the MLB algorithm proved its ability to predict chain data. Countries were also classified according to stock price data and uncertainty in economic policy, allowing us to determine the best country to invest in according to the data. The uncertainty surrounding economic policy is what makes stock price forecasting so crucial. Investors must consider the degree of economic policy uncertainty and how it affects asset prices when deciding how to allocate their assets.