Stock Prices Prediction Using Artificial Neural Networks

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Stock Prices prediction using Artificial Neural Networks

Ajay Kamat
Flat 2, Jaysagar 2, Navy Colony
Liberty Garden, Malad west, Mumbai – 400064

The aim of this research paper is to facilitate prediction of the closing price of a particular stock for a given day. A thorough analysis of the existing models for stock market behavior and different techniques to predict stock prices was carried out. These included the renowned Efficient Market Hypothesis and its rival, the Chaos Theory. It was found that the Chaos Theory is the best model for modeling the behavior of a stock market. Chaos is a nonlinear process which appears to be random, i.e. there is an order-disorder relation between
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The value of a company is its market capitalization, which is the stock price multiplied by the number of shares outstanding. For example, a company that trades at Rs.100 per share and has 1,000,000 shares outstanding has a lesser value than a company that trades at Rs.50 but has 5,000,000 shares outstanding (Rs.100 x 1,000,000 = Rs.100,000,000 while Rs.50 x 5,000,000 = Rs.250,000,000).
The purpose of a stock market is to facilitate the exchange of securities between buyers and sellers, thus reducing the risks of investing. Stock prices change everyday by market forces. This implies that share prices change because of supply and demand. If more people want to buy a stock (demand) than sell it (supply), then the price moves up. Conversely, if more people wanted to sell a stock than buy it, there would be greater supply than demand, and the price would fall.
Understanding supply and demand is easy. What is difficult to comprehend is what makes people like a particular stock and dislike another stock. This comes down to figuring out what news is positive for a company and what news is negative. The price of a stock doesn 't only reflect a company 's current value; it also reflects the growth that investors expect in the future.
The most important factor that affects the value of a company is its net earnings.
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