Muhammad Ayaan Ameen

How can AI be used for short term stock prediction?

Started July 28, 2023

Abstract or project description

Artificial intelligence (AI) has dramatically affected how business and finance are conducted. In financial sectors, AI is utilized for stock market analysis, such as predicting stock prices through utilizing large data sets and time series data to predict future trends without bias. Compared to prior analytical tools, AI allows for trend analysis without bias. This paper is a literature review that explores machine learning algorithms used in stock price prediction. The primary datasets in the identified literature focus on the historical, opening, closing, high, and low stock prices for a wide variety of stocks. After reviewing seven papers, that evaluated the AI models Long Short Term Memory and Autoregressive Integrated Moving Average, it was found that ARIMA is a better model for forecasting long-term datasets and LSTM is better for short-term forecasting with short-term datasets. This research helps investors better understand how to optimize machine learning models for stock price forecasting. ARIMA’s strength in long-term forecasting makes it viable for long-term trading. LSTM’s short-term strength makes it a better option for initial public offerings and other financial assets with little datapoints.