Advanced Algorithms for Financial Forecasting
Financial forecasting, traditionally reliant on expert analysis and statistical methods, has evolved with the advent of sophisticated algorithms.
These algorithms, leveraging vast amounts of data and advanced computational techniques, have transformed the landscape of financial prediction and analysis.
At its core, a financial forecasting algorithm is like a highly advanced, data-driven crystal ball. It sifts through mountains of financial data — from stock prices to market trends — much like a seasoned analyst, but with far greater speed and precision.
The algorithm identifies patterns and uses these insights to make predictions about future financial events.
There are many advanced algorithms to use for financial forecasting but in this article we will explain 3 main algorithms: linear regression, decision trees and random forests.
Linear Regression for Finance Forecasting
Imagine drawing a straight line through a scatterplot of stock prices over time.
