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Research Article

AI-Enhanced Stock Market Prediction: Evaluating Machine Learning Models for Financial Forecasting in the USA

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Abstract

In the USA, one of the world's largest and most liquid financial markets, the ability to anticipate market trends has deep economic implications. Precise stock market forecasting is highly instrumental for investors and analysts in making better asset allocation decisions, managing risks, and setting investment strategies. This research aimed to analyze the efficiency of some machine learning models in stock market forecast evaluation. This research project concentrated on stock market data from the USA, exploring historical price patterns, trading volumes, and relevant economic indicators to assess the performance of various machine learning models. The dataset used for this research work about predicting stock market trends is an exhaustive collection of historical stock prices, some fundamental financial indicators, and relevant news about the market, gathered from various dependable sources. Historical stock prices are retrieved from financial market databases like Yahoo Finance and Google Finance. These sources have daily records of open, high, low, and close prices, and trading volumes for thousands of publicly traded companies for extended periods, normally running into several years. The analyst selected several strategic models, namely, Random Forest, Gradient Boosting, and Logistic regression. Logistic Regression outperformed the other two models with relatively higher accuracy, while the others are just a little below. The findings of this study have implications well beyond academic curiosity into investment strategies and financial analysis. By leveraging the strengths of the best models, investors can create better-informed trading strategies. These models can also include predictive insights that give a serious edge to the risk management strategy in an investment portfolio. By using the predictive power of models like Random Forest, investors can foresee market fluctuations and adjust their portfolios to reduce potential losses.

Article information

Journal

Journal of Business and Management Studies

Volume (Issue)

5 (4)

Pages

152-166

Published

2023-07-25

How to Cite

Sizan, M. M. H., Das, B. C., Shawon, R. E. R., Rana, M. S., Montaser, M. A. A., Chouksey, A., & Pant, L. (2023). AI-Enhanced Stock Market Prediction: Evaluating Machine Learning Models for Financial Forecasting in the USA. Journal of Business and Management Studies, 5(4), 152-166. https://doi.org/10.32996/jbms.2023.5.4.16

References

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Keywords:

Stock Market Prediction, Financial Forecasting, Machine Learning, Investment Strategies