1. A Novel Hybrid Model (EMD-TI-LSTM) for Enhanced Financial Forecasting with Machine Learning.
- Author
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Ozupek, Olcay, Yilmaz, Reyat, Ghasemkhani, Bita, Birant, Derya, and Kut, Recep Alp
- Subjects
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HILBERT-Huang transform , *BUSINESS forecasting , *TECHNOLOGICAL innovations , *ARTIFICIAL intelligence , *DEEP learning - Abstract
Financial forecasting involves predicting the future financial states and performance of companies and investors. Recent technological advancements have demonstrated that machine learning-based models can outperform traditional financial forecasting techniques. In particular, hybrid approaches that integrate diverse methods to leverage their strengths have yielded superior results in financial prediction. This study introduces a novel hybrid model, entitled EMD-TI-LSTM, consisting of empirical mode decomposition (EMD), technical indicators (TI), and long short-term memory (LSTM). The proposed model delivered more accurate predictions than those generated by the conventional LSTM approach on the same well-known financial datasets, achieving average enhancements of 39.56%, 36.86%, and 39.90% based on the MAPE, RMSE, and MAE metrics, respectively. Furthermore, the results show that the proposed model has a lower average MAPE rate of 42.91% compared to its state-of-the-art counterparts. These findings highlight the potential of hybrid models and mathematical innovations to advance the field of financial forecasting. [ABSTRACT FROM AUTHOR]
- Published
- 2024
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