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Stock Price Prediction: Moving Average and Markov Chain
- 1 Tsinghua University
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Abstract
Under the assumption that the operation of corporations is stable and the economic environment is steady, there are mathematical rules in the changing of stock prices, making prediction of stock price possible. This paper selects stock price data of Xiaomi Inc, one of the leading technology companies in China, from January 2, 2019 to December 31, 2021 from Yahoo Finance. Three moving average methods, SMA, EMA and MACD, are implemented to analyze the data. Among the three moving average methods, the effect of MACD is better than that of SMA and EMA. Afterwards, Markov chain is employed to calculate from another angle The stable probability distribution of stock price is obtained by using the stability and ergodicity of Markov chain. The feasibility and accuracy of two angles of forecasting methods are verified through being compared.
Keywords
stock price prediction, simple moving average (SMA), exponential moving average(EMA), moving average convergence divergence (MACD), Markov chain
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Cite this article
Qian,H. (2023). Stock Price Prediction: Moving Average and Markov Chain. Advances in Economics, Management and Political Sciences,36,66-71.
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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Volume title: Proceedings of the 7th International Conference on Economic Management and Green Development
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