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Project Synopsis Stock Price Prediction Using Machine Learni

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103 views3 pages

Project Synopsis Stock Price Prediction Using Machine Learni

Uploaded by

princemaddheshiya511
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Stock Price Prediction Using Machine Learning

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Stock price prediction has been a challenging task due to
the volatile and non-linear nature of the financial
markets.

Introduction: The project aims to predict stock prices using machine learning algorithms by
"
analyzing historical data. Stock price prediction has been a challenging task due to the volatile
and non-linear nature of the financial markets. By leveraging machine learning techniques, this
project seeks to develop a model that can predict future stock prices based on historical patterns,
trends, and other influencing factors such as market sentiment, news, and macroeconomic
indicators.

The project will explore various algorithms and approaches, including


regression models, time series forecasting, and neural networks, to
identify the best-suited model for accurate predictions.

Objective: To design and implement a machine learning model capable of predicting the future
prices of a stock based on historical data. The project will explore various algorithms and
approaches, including regression models, time series forecasting, and neural networks, to
identify the best-suited model for accurate predictions.

Data Collection: The project will collect stock price data from reliable sources such as Yahoo
Finance, Google Finance, or Alpha Vantage. The dataset will include the following parameters:
• Date
• Opening price
• Closing price
• Highest price
• Lowest price
• Volume of trades

Additional data such as market sentiment (news, social media), global economic factors, and
interest rates may also be incorporated.

Methodology:

• Collect historical stock data (opening/closing prices, volume, etc.).


• Preprocess and analyze the data to identify trends.
• Train and test various machine learning models to predict stock prices.
• Evaluate model performance using metrics like RMSE and MAE.

The expected outcome is a model that can make reasonably accurate stock price predictions,
aiding in more informed financial decisions. However, the model's accuracy will be limited by
the inherent volatility of stock markets.

1. Data Preprocessing: The data will be cleaned, normalized, and split into training and testing
sets. Feature engineering techniques will be applied to create new features from the existing data,
such as moving averages and price momentum.
2. Exploratory Data Analysis (EDA): This step involves visualizing and understanding the
relationships between different features to identify patterns or trends that can be useful for model
training.

3. Model Selection:

• Linear Regression: A baseline model to understand basic linear relationships.


• Decision Trees and Random Forests: To capture non-linear patterns.
• Time Series Models (ARIMA, LSTM): Specifically tailored for time-based data to
forecast future trends.
• Support Vector Machines (SVM) and XGBoost: To handle higher-dimensional data
and improve accuracy.
• Neural Networks: Especially recurrent neural networks (RNNs) and long short-term
memory (LSTM) networks to model complex temporal dependencies.
4. Training and Validation: The models will be trained using historical data and validated with
test data to assess performance. Techniques such as cross-validation and hyperparameter tuning
will be applied to optimize model performance.

5. Evaluation Metrics: The models will be evaluated using common metrics such as Mean
Absolute Error (MAE), Root Mean Squared Error (RMSE), and R-squared to measure the
accuracy and robustness of the predictions.

Expected Outcome: The outcome of the project is to create a machine learning model that can
predict stock prices with a reasonable degree of accuracy. The project will also highlight the
limitations of the model and areas for improvement, such as incorporating more complex
features like sentiment analysis and external financial data.

Conclusion: Stock price prediction using machine learning can provide valuable insights for
investors and financial analysts. Although predicting stock prices with perfect accuracy is
impossible due to the inherent volatility of financial markets, machine learning models can help
in making more informed decisions by identifying trends and patterns in historical data.

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