Using Internet Search Trends and Historical Trading Data for Predicting Stock Markets by the Least Squares Support Vector Regression Model

• Published in: Computational intelligence and neuroscience Vol. 2018; no. 2018; pp. 1 - 15
• Main Authors: Pai, Ping-Feng, Lin, Kuo-Ping, Hong, Ling-Chuang
• Format: Journal Article
• Language: English
• Published: Cairo, Egypt Hindawi Publishing Corporation 01.01.2018; Hindawi; John Wiley & Sons, Inc; Hindawi Limited
• Subjects: American dollar; Artificial intelligence; Database searching; Economic forecasting; Forecasts and trends; Fuzzy sets; Independent variables; Internet; Internet stocks; Internet/Web search services; Least squares; Market value; Markets; Neural networks; Numerical prediction; Online searching; Optimization techniques; Prices; Regression models; Search engines; Securities markets; Signal processing; Social networks; Social organization; Software; Stock exchanges; Stock markets; Stocks; Support vector machines; Time series; Trends
• ISSN: 1687-5265; 1687-5273
• DOI: 10.1155/2018/6305246

Historical trading data, which are inevitably associated with the framework of causality both financially and theoretically, were widely used to predict stock market values. With the popularity of social networking and Internet search tools, information collection ways have been diversified. Instead of only theoretical causality in forecasting, the importance of data relations has raised. Thus, the aim of this study was to investigate performances of forecasting stock markets by data from Google Trends, historical trading data (HTD), and hybrid data. The keywords employed for Google Trends are collected from three different ways including users’ definitions (GTU), trending searches of Google Trends (GTTS), and tweets (GTT) correspondingly. The hybrid data include Internet search trends from Google Trends and historical trading data. In addition, the correlation-based feature selection (CFS) technique is used to select independent variables, and one-step ahead policy is adopted by the least squares support vector regression (LSSVR) for predicting stock markets. Numerical experiments indicate that using hybrid data can provide more accurate forecasting results than using single historical trading data or data from Google Trends. Thus, using hybrid data of Internet search trends and historical trading data by LSSVR models is a promising alternative for forecasting stock markets.