1. bookVolume 14 (2014): Issue 1 (June 2014)
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06 May 2008
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access type Open Access

Forecasting Changes in Stock Prices on the Basis of Patterns Identified with the Use of Data Classification Methods

Published Online: 11 Dec 2014
Page range: 7 - 21
Received: 18 Nov 2013
Accepted: 01 Jul 2014
Journal Details
License
Format
Journal
First Published
06 May 2008
Publication timeframe
2 times per year
Languages
English

The paper develops the concept of harnessing data classification methods to recognize patterns in stock prices. The author defines a formation as a pattern vector describing the financial instrument. Elements of such a vector can be related to the stock price as well as sales volume and other characteristics of the financial instrument. The study uses data concerning selected companies listed on the stock exchange in New York. It takes into account a number of variables that describe the behavior of prices and volume, both in the short and long term. Partitioning around medoids method has been used for data classification (for pattern recognition). An evaluation of the possibility of using certain formations for practical purposes has also been presented.

Keywords

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