An Investigation and Development into the Use of AI-Based Analytical Methods for Forecasting the Stock Market

• Published in: 2023 4th International Conference on Smart Electronics and Communication (ICOSEC) pp. 1303 - 1307
• Main Authors: Sheeba, M., Kumar, D. Ranjith, Kirubakaran, S., Dixit, Ila, Rani, D. Leela, Yadav, Ajay Singh
• Format: Conference Proceeding
• Language: English
• Published: IEEE 20.09.2023
• Subjects: Adaptation models; Analytical models; Artificial Intelligence; Biological system modeling; etc; High Accuracy; Prediction algorithms; Predictive models; Radio frequency; Recurrent neural networks; Stock Market Forecasting
• DOI: 10.1109/ICOSEC58147.2023.10275988

Forecasting the stock market is difficult due to the fact that a number numerous factors, including the current situation of economy, current politics, and market sentiment. Traditional analytical methods have limitations in accurately predicting stock prices, leading to increased curiosity about using algorithms based on artificial intelligence (AI) and machine learning (ML) stock market forecasting. This paper investigates the use of AI-based analytical methods for forecasting the stock market and presents a detailed analysis of various algorithms used in AI-based stock market forecasting. The use of AI-based analytical methods for forecasting the stock market has several benefits. Firstly, AI-based models can analyse vast amounts of financial data much faster than traditional methods, allowing for more accurate and timely predictions. Secondly, AI-based models can handle complex relationships between different factors affecting stock prices, such as market trends, news events, and economic indicators, which can be challenging to capture using traditional methods. This study also discusses about the challenges and limitations of using AI-based models for stock market forecasting research in the future research. Here, this study uses a novel theory of recurrent neural networks and a random forest model to enable prediction with more accuracy. One of the commonly used algorithms in AI-based stock market forecasting is the recurrent neural network (RNN), which model that uses deep learning. RNNs are very helpful for modelling time-series information, like stock prices, just because they may ensnare the temporal data dependencies. In addition, RNNs can be used to generate forecasts by predicting the next value in a set of timestamps based on previous values. Another popular algorithm for stock market forecasting is the Random Forest (RF) ensemble model. RF models are a type of decision tree-based algorithm that can generate accurate predictions by combining the outputs of multiple decision trees. RF models are particularly useful for handling large datasets with many features.