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23 views5 pages

Stock PPT

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219y1a3923
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Annamacharya Institute of Technology and Sciences

Department of Computer Science & Engineering

Stock Price Forecasting with Innovative LSTM Deep Learning Model


Using Historical Data
PRESENTED BY

C.SRAVANTHI (Roll. No. 21701A05I5)


B.SANDEEP REDDY (Roll. No. 21701A05G3)
A.REDDYKUMARI (Roll. No. 22705A0523)
K.SANTHOSH (Roll. No. 21701A05G4)

Under the Guidance of


Mr.B.Naveen Kumar, M.tech (P.hD) (Assistant Professor)
Department of Computer Science & Engineering,
Annamacharya Institute of Technology and Sciences
New Boyana Palli, Rajampet-516126

28/09/2024 Dept. of CSE, AITS,Rajampet 1


ABSTRACT
Stock price forecasting is a crucial component of financial analysis, demanding
sophisticated models to predict market trends accurately. With the increasing complexity of
market dynamics, traditional methods are often inadequate. This project explores various
forecasting models to predict stock prices effectively using historical data. Traditional
forecasting methods, such as linear regression and ARIMA (Autoregressive Integrated
Moving Average), have limitations in handling complex, nonlinear relationships and long-
term dependencies inherent in stock data. This study introduces an advanced approach using
Long Short-Term Memory (LSTM) networks to address these shortcomings. LSTM
networks excel in modeling sequential data and long-term dependencies through their
memory cells and gating mechanisms, making them highly suitable for predicting stock
prices. The LSTM-based approach provides a more robust and accurate forecasting solution
compared to traditional models.
Keywords : Stock Price Forecasting, LSTM Deep Learning, Historical Data, Time Series
Analysis, Neural Networks, Linear Regression, ARIMA, Sequential Data Modeling,
Forecast Accuracy.

28/09/2024 Dept. of CSE, AITS,Rajampet 2


PROBLEM DEFINITION
The core problem in stock price forecasting is that traditional models like linear regression
and ARIMA are inadequate for capturing the complex, nonlinear nature of stock market
data. Linear regression assumes a simple linear relationship, which cannot account for the
intricate patterns and dependencies in financial time series. ARIMA, though useful for basic
time series tasks, struggles with the volatile and dynamic nature of stock prices, failing to
capture long-term trends and nonlinear behavior. This leads to inaccurate predictions, which
can result in poor investment decisions and increased financial risk. Additionally, these
models lack the flexibility to adapt to sudden market fluctuations and evolving conditions.
Stock prices are influenced by a variety of factors, such as economic events and investor
sentiment, making it essential to use more advanced techniques. The challenge is finding a
model that can effectively handle the complexities of stock data and deliver more accurate,
real-time forecasts.

28/09/2024 Dept. of CSE, AITS,Rajampet 3


Existing Work

Existing work in stock price forecasting has primarily relied on traditional models like
linear regression and ARIMA. Linear regression assumes a simple linear relationship, which
limits its effectiveness in capturing the complex, nonlinear dynamics of financial markets.
ARIMA, while useful for univariate time series forecasting, struggles with nonlinear
patterns and fails to account for long-term dependencies often found in stock data.
Additionally, machine learning techniques such as Support Vector Machines (SVM) and
Random Forest have been explored to enhance prediction accuracy, offering better
adaptability to nonlinear relationships. However, these models still face challenges in
effectively handling temporal dependencies inherent in stock prices. Other approaches,
including Decision Trees and k-Nearest Neighbors (k-NN), have also been utilized but often
fall short in delivering reliable forecasts over longer time horizons. Despite these
advancements, accurately predicting stock prices in real-time remains a significant
challenge due to market volatility and the influence of external factors.

28/09/2024 Dept. of CSE, AITS,Rajampet 4


Proposed Work

The proposed model for stock price forecasting leverages Long Short-Term Memory
(LSTM) networks, which are well-suited for handling sequential data and capturing long-
term dependencies. LSTMs address the shortcomings of traditional forecasting methods by
using memory cells and gating mechanisms that allow the retention of relevant information
over time, making them effective for financial time series data with complex patterns. By
training the LSTM on historical stock price data, the model can identify intricate trends that
simpler models may miss. This architecture enables it to predict future prices based on past
performance while accounting for both short-term fluctuations and long-term trends.
Additionally, the model adapts to changing market conditions, enhancing its accuracy in
real-time scenarios. To further boost performance, the approach can incorporate external
market indicators, trading volumes, and macroeconomic factors, enriching the input data for
the LSTM. Overall, this LSTM-based model provides a sophisticated solution for stock
price forecasting, effectively addressing the challenges posed by traditional methods and
delivering valuable insights for investors and traders.

28/09/2024 Dept. of CSE, AITS,Rajampet 5

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