ITM Web of Conferences 56, 05016 (2023) https://doi.org/10.

1051/itmconf/20235605016
ICDSAC 2023

Stock Price Prediction Website Using Linear

Regression - A Machine Learning Algorithm
Sonali Antad, Saloni Khandelwal, Anushka Khandelwal, Rohan Khandare, Prathamesh
Khandave, Dhawal Khangar, Raj Khanke
Department of Engineering, Sciences and Humanities (DESH)
Vishwakarma Institute of Technology, Pune, 411037, Maharashtra, India.

Abstract. The most valuable indicator of a company's success is its stock

price, which can rise in tandem with the price of a single share. For that
reason, businesses advertise their stocks to their customers in an effort to
get them to buy them. The volatility of stock prices makes it difficult for
clients or stockholding companies to forecast the future value of a single
stock. Therefore, stock market forecasting has emerged as the most well-
liked topic in the corporate sector, and hence solving this problem has
become so important for the betterment of the investors and buyers as many
a times they have to face loss in their investment and this problem can be
solve by various Machine learning algorithms .To solve this problem we
are developing one stock price prediction website using Python and Linear
Regression which is one of the best Machine Learning statistical method
for predictive analysis. We are using historical Data for the prediction.
Finding a method to use linear regression models to obtain more precise
values is the major goal. To acquire more precise results from the linear
regression models, it is possible to change the dataset that will be used to
train the models. The purpose of this paper is to demonstrate that linear
regression is the most appropriate and effective method for forecasting stock
market analysis.

Keywords. Machine Learning, Linear Regression, Python, Django

framework, Yahoo Finance.

1.Introduction

The stock market is a regulated marketplace where investors can buy or sell stocks publicly
or privately. Companies often turn to the stock market to raise capital for business expansion,
making it a popular investment option for investors. To make informed investment decisions,
many investors rely on predictions based on past market trends. In recent years, the stock
market has changed significantly, making it crucial to anticipate its future value or price given
how dynamic the market is. Predictive analysis is frequently carried out using linear
regression, a mathematical technique and supervised machine learning method. The linear
regression model, which generates linear correlations between independent and dependent
variables, is largely consistent with the continuous/real values of mathematical variables. The
algorithm makes the predictions in accordance with the guidance provided in the training data

© The Authors, published by EDP Sciences. This is an open access article distributed under the terms of the Creative Commons
Attribution License 4.0 (https://creativecommons.org/licenses/by/4.0/).
ITM Web of Conferences 56, 05016 (2023) https://doi.org/10.1051/itmconf/20235605016
ICDSAC 2023

set after first training with it. The other tools and technology used in the given website are
html and CSS which are used for frontend. The library named scikit learn is used as it has all
machine learning algorithms and functions inbuilt in it. The framework Django which comes
under Python is used at the backend to access web services and resources which is inbuilt in
python programming language. To fetch the data for the website which should be reliable and
accurate, Yahoo finance site is used and connecting it with API. So the prediction of stocks
of all the companies which are there in yahoo finance can be done through our website.

Here are summaries of 10 research papers on stock price prediction using linear
regression algorithm as a machine learning approach:
[1] This review paper by Shruti Shukla and Bhavya Shah presents a multiple linear
regression model for stock price prediction based on historical price data and
financial indicators.
[2] This research paper by Nusrat Rouf, Saurabh Singh etc. analysed machine
learning algorithms used for stock price prediction which is linear regression. The
authors highlighted the importance of feature selection and data pre-processing in
improving the accuracy of the prediction models.
[3] This research paper by Vaishnavi Gururaj, Shriya V R and Dr. Ashwini K
compared the performance of linear regression and support vector machine models
for stock price prediction based on historical price data and technical indicators.
[4] This review by Nils Karlsson compared the performance of multiple linear
regression and artificial neural network models for stock price prediction based on
historical price data and financial indicators. The authors found that the artificial
neural network model outperformed the linear regression model.
[5] This research paper by Payal Soni, Yogya Tewari, Deepa Krishnan analysed the
state-of-the-art machine learning techniques used for stock price prediction,
including linear regression. The authors emphasized the importance of
incorporating external factors such as news sentiment and macroeconomic
indicators in the prediction models.
[6] This research Paper by Meher Vijh, Deeksha Chandola etc. depicts that linear
regression machine learning technique is best for predictive analysis of statistical
data. The authors found that the linear regression model is perfect for predicting
stock prices.
[7] This review by Kastberg, Daniel This study compared the performance of linear
regression and random forest regression models for stock price prediction based on
historical price data and technical indicators. The authors found that the random
forest regression model outperformed the linear regression model.
[8] This paper by Ogulcan E. Orsel, Sasha S. Yamada compared the performance of
various machine learning algorithms, including linear regression, for stock price
prediction based on historical price data and financial indicators, random forest
regression model and LSTM.
[9] This study presented a Multivariate Regression and Logistic Regression by
Jaydip Sen.
[10] This research paper by Indu Kumar, Chetna Utreja etc. (2018): This study
assessed the effectiveness of different machine learning techniques, including
Forestry and Support vector machines.

This website can predict the stock prize for next 1 day to the next 360 days through
graphical representation. Predicting stock market behavior has been a difficult task
for researchers, but with the help of machine learning, it has become possible to
accurately forecast stock prices.

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ICDSAC 2023

2.Methodology
In the given project, stock prices are predicted using Linear regression algorithm in
machine learning and data implementation using python tools and libraries like Scikit-learn,
Numpy are done.

2.1 Linear regression

A linear regression contains the labelled data (supervised learning) which generates the
relationship between independent and dependent variables using simple mathematical
equations and thereby calculate the best fit line or line of minimum reluctance. This line can
be used to calculate stock predictions using graph or curve analysis.

Linear regression is considered to be better than most of the other techniques as it is easier
to Implement and contains basic mathematical and computational theory. It involves fitting
a straight line to the given data points of independent variable(x) and dependent variable(y)
whose slope is (m) and error is (e). This line is implemented by reducing the sum of squared
differences between actual values understood in the above equations and diagrams-:

y = mx + c + e --------------------------------------(1)

here, ‘c’ is the intercept formed on dependent axis y. for multiple data sets with slopes m 1,
m2…mk
we can use-:
y = m1x + m2x …. mkx + c + e -----------------( 2)

Fig. 1. Representation of best fit line of regression [16]

Steps for implementation of Linear regression includes-:

1) Importing necessary computing packages and creating the data from input files using
pandas library.
2) Filter out the essential variables and generate a numpy array from pandas data frame
to store continuous set of data.
3) Assigning the input variable (x,y) and performing recursive feature normalization ,
where we will compress our input variables to magnified values for faster speed and
accuracy.
4) Plotting the data sets using matplotlib and plotly tools through normalized data and
generate the graph as shown below-:

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ICDSAC 2023

Fig. 2. Normalized stock market data

5) Training the algorithm and computing the hypothesis (approximate target value-y)
for stock price vs time duration curve.
6) Calculating the hypothesis hx and SSE (sum of squared error) cθ using the below
equations-:

hx = θ0 x0 + θ1x1----------------(3)

where θ0 and θ1 have minimal error or deviation variables for linear fit and x0 tends to 1. SSE
which is difference between hx and actual values can be calculated using-:
𝑛𝑛
θൌ֏∑
θ=0
(hθx – y)2 ---------------(4)

by reducing the SSE, we can optimize our results and best fit line.

7)calculating the gradient descend and compute optimal θ0 , θ1 which are required for plotting
best fit line using below equation-:

θ1 = θ0 –α Ω cθ------------------(5)

Where θ0 and θ1 are current and next optimal positions, α is small step , Ω is direction and
c(θ) is SSE..

8)model testing, plotting best fit line and graph, deployment-:

Fig. 3. Implementation of best fit line and predicted graph

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ITM Web of Conferences 56, 05016 (2023) https://doi.org/10.1051/itmconf/20235605016
ICDSAC 2023

2.2 Flow of stock market prediction website -

In order to develop GUI (graphical user interface) to make this predictor tool
accessible to users, predictor is converted to a website which will show real time stock market
prediction.

The first step in this is to collect and fetch the data from reliable source site Yahoo-
finance and creating a DBMS (data base management system) using SQLite. Data
preprocessing is yet another important step in which inaccuracy or inconsistencies in data
had been removed and data is transformed into user understandable format using pandas
library in python. In the backend part numPy, plotly, matplotlib are used for multiple
operation execution. The prediction part is performed using linear regression technique of
machine learning. To access the machine learning tools and resources for the website, scikit
learn library and Django framework are used respectively. For UI/UX part Html5 and CSS3
versions are used. The website is maintained at regular intervals and fetch new and current
status of data everytime.

2.3 Flowchart

Collect Data

Data Pre-processing

Build Database

Choose ML Algorithm

Training Algorithm

Model’s Testing

Connecting to Web Server and API

Create Frontend and Backend

Update and Maintenance

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3.Results and Discussions

The primary objective of this project was to predict stock market prices at a higher
accuracy rates and it had been achieved at an approximate accuracy ranging in between 75%
to 85 %. The stock market prediction website named “J3 predictor” can predict stock values
from 1 day to 365 days (1 year). The website has stock data of multiple stocks connected to
the data server through yahoo finance by API path. Website has ticker information of all the
stocks available at the third tab, from which ticker value can be inserted into predictor page
of second tab and get the results as shown below.

Fig. 4. Display of stock information on result page

Fig. 5. Recent and prediction stock display for ADANIGREEN upto 90 days.

The results obtained at the first tab of the website are for top 6 companies and the remaining
stock prediction occurs at prediction section. The comparison between actual stock prices

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and predicted prices for various NIFTY trading companies for 3 days duration from 10 may
to 12 may are shown in table given below-:

Table 1. actual and predicated value

COMPANY ACTUAL PREDICTED

NAME VALUES VALUES

Adani Green 896.45 INR 894.16 INR

Tata Motors 513.80 INR 515.70 INR

Axis Bank 911.00 INR 908.80 INR

Reliance Industries
2481.90 INR 2479.80 INR

State Bank of
India 578.10 INR 575.00 INR

If the user enters wrong ticker symbol or wrong time duration then the predictor will give
error that the data is inadequate. In this way, the stock prediction using machine learning has
proven very useful for stock market prediction and can help many people who are newcomers
to stock market or want to make money using stocks.

4. Helpful Hints
4.1. Figures and Tables

Fig. 6. Predicted page of Tata Elxsi

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Fig. 7. Prediction Graph of Tata Elxsi

Fig. 8. Prediction page of AXIS BANK.

Fig. 9. Prediction graph of AXIS BANK

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5.Future Scope

• Increased prediction accuracy. Future stock price projections are likely to be more accurate
thanks to continuously improving machine learning algorithms
• Information extraction from news articles and other text sources using natural language
processing (NLP). A company's financial performance, competitive environment, and other
elements that might affect its stock price can all be learned about using NLP. Then, using this
data, machine learning systems can be trained to produce more precise predictions.
• The application of machine learning to forecast how non-financial events would affect stock
values. Natural disasters or political scandals are examples of non-financial events that can
have a big impact on stock values. Machine learning can be used to forecast how these
occurrences would affect stock prices, enabling investors to reduce risk in their portfolios.
• The application of machine learning to forecast how climate change would affect the stock
market. To reduce risk in investor portfolios, machine learning can be used to forecast how
climate change would affect the stock market.

Overall, the potential of employing machine learning to anticipate stock prices is very
positive. Machine learning algorithms are improving in accuracy, and more data is being
made available to train them. Additionally, new machine learning algorithms are always
being created. Future stock price predictions are likely to be more accurate because of these
considerations.

6.Conclusion
Many people desire to forecast future stock prices in order to increase their fortune because
the stock market is continuously changing. However, due to the volatile nature of the stock
market, current solutions that employ cutting-edge technology like Deep Learning, AI, and
Neural Networks have not proven successful in making precise forecasts. As a result, the
analysis of the current methods for stock market prediction using a linear regression
algorithm is the main goal of this review work. A supervised machine learning approach
called linear regression establishes a linear relationship between independent and dependent
variables. The choice of an appropriate dataset is crucial for successful stock market
prediction using linear regression, according to a review of research papers. According to the
experiments, the linear regression method performed better in terms of accuracy than other
machine learning techniques. However, a lot of experts also stated that they planned to
investigate neural networks' potential for stock market prediction in the future.

7. Acknowledgement
The research project received support from a renowned institution in Pune that is actively
involved in the field of education and engineering sciences. The head of the Department of
DESH, Prof. Chandrashekhar Mahajan, and the coordinator Dr. Sachin Sawant from this
institution provided valuable assistance at every level of the project, and their contributions
are highly appreciated. According to the experiments, the linear regression method performed
better in terms of accuracy than other machine learning techniques. However, a lot of experts
also stated that they planned to investigate neural networks' potential for stock market
prediction in the future.

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8. References

[1]S.Shukla and B.Shah’s “Stock Price Prediction Using Multiple Linear Regression
Models”International Journal of Engineering Science Invention (IJESI). Published in
October 2018.
[2] N.Rouf and S.Singh’s “Stock Price Prediction Using Machine Learning Techniques: A
Decade Survey on Methodologies, Recent Developments, and Future Directions” MDPI.
Published in November 2021.
[3] V. Gururaj, S. V R and A.karthick’s “Stock Price Prediction Using Linear Regression and
Support Vector Machines”.International Journal of Applied Engineering Research.
Published in 2019.
[4] N. Karlsson’s “Comparison of Linear Regression and Neural Network for Stock Price
Prediction”.
[5] P.Soni, Y.Tewari, D. Krishnan-“Machine Learning approaches in Stock Price Prediction:
A Systematic Review”, Journal of Physics Conference Series. Published in 2022.
[6] M.Vijh, D.Chandola’s “Stock Closing Price Prediction using Machine Learning
Techniques”. International Conference on Computational Intelligence and Data Science
(ICCIDS).
[7] K.Daniel’s “A Study on Stock Price Prediction Using Linear Regression and Random
Forest Regression” (2022).
[8] O. E. Orsel, S. S. Yamada-“Comparative Study of Machine Learning Models for Stock
Price Prediction” (2022).
[9] J.Sen-“Stock Price Prediction Using Machine Learning and Deep Learning Framework”,
6th International Conference on Business Analytics and Intelligence (ICBAI). Published
in December 2018.
[10] I.Kumar, C.Utreja’s “A Comparative Study of Supervised Machine Learning
Algorithms for Stock Market Trend Prediction”. IEEE Conference. (2018).
[11] M.Nikou, G.Mansourfar, J.Bagherzadeh’s “Stock price prediction using DEEP learning
algorithm and its comparison with machine learning algorithms”. Intelligent Systems in
Accounting, Finance and Management. Published in 2019.
[12] V.K. Sai Reddy’s “Stock market prediction using machine learning”. International
Research Journal of Engineering and Technology (IRJET). Published in 2018.
[13]M. Obthong, N. Tantisantiwong, W.Jeamwatthanachai, G.Wills’s “A survey on machine
learning for stock price prediction: Algorithms and techniques”.
[14]M. Umer, M. Awais, M. Muzammul- “Stock market prediction using machine learning
(ML) algorithms” (ADCAIJ) Advances in Distributed Computing and Artificial
Intelligence Journal. Published in year 2019.
[15] D. Kumar, P. K. Sarangi, R.Verma- “A systematic review of stock market prediction
using machine learning and statistical techniques” Published in 2022.
[16]Javatpoint’s-https://static.javatpoint.com/tutorial/machine-learning/images/linear-
regression-in-machine-learning.png.

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