A multivariate LSTM-based deep learning model for stock market prediction

Research Article
Open access

A multivariate LSTM-based deep learning model for stock market prediction

Samuel Ibukun Olotu 1*
  • 1 Federal University of Technology Akure, Ilesa-Owo Expressway Akure, Nigeria    
  • *corresponding author siolotu@futa.edu.ng
Published on 22 March 2023 | https://doi.org/10.54254/2755-2721/2/20220602
ACE Vol.2
ISSN (Print): 2755-273X
ISSN (Online): 2755-2721
ISBN (Print): 978-1-915371-19-5
ISBN (Online): 978-1-915371-20-1

Abstract

Stocks represent ownership in a company and a proportionate claim on its assets and earn-ings. Investors trade stocks via an exchange by buying at a price and selling at a higher price. Due to market volatility forecast it is a necessity for trading to determine the direc-tion of the stock price in order to maximize profit and minimize loss. Traditional methods of stock price predictions include technical and fundamental analysis. The technical deals with historical price movement while fundamental analysis uses the relationship between financial information about the company. However, these predictions methods sometimes fail to yield desired result sometimes due to the influence of factors such as national poli-cies, global and regional economics, psychological, human among many. This work propos-es a prediction model for stock market using LSTM algorithm. Multivariate time series stock price data is obtained from Nigerian Stock Exchange Index to implement the model. The experimental result of the technique is measured using MAPE, MAE, MSE and rRMSE performance metrics. The accuracy of the result shows that the proposed system outper-forms existing traditional and deep learning methods.

Keywords:

deep learning, multivariate, stock price prediction, long short-term memory

Olotu,S.I. (2023). A multivariate LSTM-based deep learning model for stock market prediction. Applied and Computational Engineering,2,187-195.
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References

[1]. Chavan, S., Doshi, H., Godbole, D., Parge, P. & Gore, D.: 1D Convolutional Neural Network for Stock Market Prediction using Tensorflow. International Journal of Innovative Science and Research Technology, 4, 272–275 (2019).

[2]. Huang, C. J., Chen, P. W. & Pan, W. T.: Using multi-stage data mining technique to build forecast model for Taiwan stocks. Neural Computing and Applications, 21, 2057–2063 (2012).

[3]. Neto, M. C. A., Calvalcanti, G. D. C. & Ren, T. I. Financial time series prediction using exogenous series and combined neural networks. International Joint Conference on Neural Networks, 149–156 (2009).

[4]. Hsu, M. W., Lessmann, S., Sung, M. C., Ma, T. & Johnson, J. E. V.: Bridging the divide in financial market forecasting: machine learners vs. financial economists. Expert Systems with Application, 61, 215–234 (2016).

[5]. Sezer, O. B., Gudelek, M. U. & Ozbayoglu, A. M. Financial time series forecasting with deep learning: A systematic literature review: 2005–2019. Applied Soft Computing, 149-156 (2020).

[6]. Fawaz, H. I., Forestier, G., Weber, J., Idoumghar, L., Muller, P. A.: Deep Neural Network Ensembles for Time Series Classification. International Joint Conference on Neural Networks (IJCNN), 1-6 (2019).

[7]. Gozalpour, N., Teshnehlab, M.: Forecasting Stock Market Price Using Deep Neural Networks. In: 7th Iranian Joint Congress on Fuzzy and Intelligent Systems (CFIS), 7, 1–4 (2019). IEEE

[8]. Kumar Chandar, S.: Grey Wolf optimization-Elman neural network model for stock price prediction. Soft Computing, 25(1), 649–658 (2020).

[9]. Ingle, V. & Deshmukh, S.: Ensemble deep learning framework for stock market data prediction (EDLF-DP). Global Transitions Proceedings, 2(1), 47–66 (2021).

[10]. Huynh, H. D., Dang, L. M., Duong, D.: A new model for stock price movements prediction using deep neural network. International Symposium on Information and Communication Technology, 57–62 (2017).

[11]. Wu, Q., Zhang, Z., Pizzoferroto, A., Cucuringu, M., Liu, Z.: A Deep Learning Framework for Pricing Financial Instruments. ArXivorg (2019).

[12]. Nikou, M., Mansourfar, G., Bagherzadeh, J.: Stock price prediction using DEEP learning algorithm and its comparison with machine learning algorithms. Intelligent Systems in Accounting, Finance and Management, 26(4), 164–174 (2019).

[13]. Pang, X., Zhou, Y., Wang, P., Lin, W., Chang, V.: An innovative neural network approach for stock market prediction. The Journal of Supercomputing, 76(3), 2098–2118 (2020).

[14]. Nabipour, M., Nayyeri, P., Jabani, H., Mosavi, A., & Salwana, E.: Deep learning for stock market prediction. Entropy, 22(8), 1–23 (2020).

[15]. Putri, K. S., Halim, S.: Currency movement forecasting using time series analysis and long short-term memory. International Journal of Industrial Optimization, 1(2), 71 (2020).

[16]. Vargas, M. R., Lima, B. S. L. P. De, Evsukoff, A. G.: Deep learning for stock market prediction from financial news articles. In: international conference on computational intelligence and virtual environments for measurement systems and applications (CIVEMSA), 60–65 (2017). IEEE

[17]. Oncharoen, P., Vateekul, P.: Deep Learning for Stock Market Prediction Using Event Embedding and Technical Indicators. In: 5th international conference on advanced informatics: concept theory and applications (ICAICTA), 19-24 (2018).

[18]. Yang, C., Zhai, J., Tao, G., Haajek, P.: Deep Learning for Price Movement Prediction Using Convolutional Neural Network and Long Short-Term Memory. Mathematical Problems in Engineering, (2020).


Cite this article

Olotu,S.I. (2023). A multivariate LSTM-based deep learning model for stock market prediction. Applied and Computational Engineering,2,187-195.

Data availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

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About volume

Volume title: Proceedings of the 4th International Conference on Computing and Data Science (CONF-CDS 2022)

ISBN:978-1-915371-19-5(Print) / 978-1-915371-20-1(Online)
Editor:Alan Wang
Conference website: https://www.confcds.org/
Conference date: 16 July 2022
Series: Applied and Computational Engineering
Volume number: Vol.2
ISSN:2755-2721(Print) / 2755-273X(Online)

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References

[1]. Chavan, S., Doshi, H., Godbole, D., Parge, P. & Gore, D.: 1D Convolutional Neural Network for Stock Market Prediction using Tensorflow. International Journal of Innovative Science and Research Technology, 4, 272–275 (2019).

[2]. Huang, C. J., Chen, P. W. & Pan, W. T.: Using multi-stage data mining technique to build forecast model for Taiwan stocks. Neural Computing and Applications, 21, 2057–2063 (2012).

[3]. Neto, M. C. A., Calvalcanti, G. D. C. & Ren, T. I. Financial time series prediction using exogenous series and combined neural networks. International Joint Conference on Neural Networks, 149–156 (2009).

[4]. Hsu, M. W., Lessmann, S., Sung, M. C., Ma, T. & Johnson, J. E. V.: Bridging the divide in financial market forecasting: machine learners vs. financial economists. Expert Systems with Application, 61, 215–234 (2016).

[5]. Sezer, O. B., Gudelek, M. U. & Ozbayoglu, A. M. Financial time series forecasting with deep learning: A systematic literature review: 2005–2019. Applied Soft Computing, 149-156 (2020).

[6]. Fawaz, H. I., Forestier, G., Weber, J., Idoumghar, L., Muller, P. A.: Deep Neural Network Ensembles for Time Series Classification. International Joint Conference on Neural Networks (IJCNN), 1-6 (2019).

[7]. Gozalpour, N., Teshnehlab, M.: Forecasting Stock Market Price Using Deep Neural Networks. In: 7th Iranian Joint Congress on Fuzzy and Intelligent Systems (CFIS), 7, 1–4 (2019). IEEE

[8]. Kumar Chandar, S.: Grey Wolf optimization-Elman neural network model for stock price prediction. Soft Computing, 25(1), 649–658 (2020).

[9]. Ingle, V. & Deshmukh, S.: Ensemble deep learning framework for stock market data prediction (EDLF-DP). Global Transitions Proceedings, 2(1), 47–66 (2021).

[10]. Huynh, H. D., Dang, L. M., Duong, D.: A new model for stock price movements prediction using deep neural network. International Symposium on Information and Communication Technology, 57–62 (2017).

[11]. Wu, Q., Zhang, Z., Pizzoferroto, A., Cucuringu, M., Liu, Z.: A Deep Learning Framework for Pricing Financial Instruments. ArXivorg (2019).

[12]. Nikou, M., Mansourfar, G., Bagherzadeh, J.: Stock price prediction using DEEP learning algorithm and its comparison with machine learning algorithms. Intelligent Systems in Accounting, Finance and Management, 26(4), 164–174 (2019).

[13]. Pang, X., Zhou, Y., Wang, P., Lin, W., Chang, V.: An innovative neural network approach for stock market prediction. The Journal of Supercomputing, 76(3), 2098–2118 (2020).

[14]. Nabipour, M., Nayyeri, P., Jabani, H., Mosavi, A., & Salwana, E.: Deep learning for stock market prediction. Entropy, 22(8), 1–23 (2020).

[15]. Putri, K. S., Halim, S.: Currency movement forecasting using time series analysis and long short-term memory. International Journal of Industrial Optimization, 1(2), 71 (2020).

[16]. Vargas, M. R., Lima, B. S. L. P. De, Evsukoff, A. G.: Deep learning for stock market prediction from financial news articles. In: international conference on computational intelligence and virtual environments for measurement systems and applications (CIVEMSA), 60–65 (2017). IEEE

[17]. Oncharoen, P., Vateekul, P.: Deep Learning for Stock Market Prediction Using Event Embedding and Technical Indicators. In: 5th international conference on advanced informatics: concept theory and applications (ICAICTA), 19-24 (2018).

[18]. Yang, C., Zhai, J., Tao, G., Haajek, P.: Deep Learning for Price Movement Prediction Using Convolutional Neural Network and Long Short-Term Memory. Mathematical Problems in Engineering, (2020).