The use of predictive analytics in finance

Statistical and computational methods are being increasingly integrated into Decision Support Systems to aid management and help with strategic decisions. Researchers need to fully understand the use of such techniques in order to make predictions when using financial data. This paper therefore presents a method based literature review focused on the predictive analytics domain. The study comprehensively covers classification, regression, clustering, association and time series models. It expands existing explanatory statistical modelling into the realm of computational modelling. The methods explored enable the prediction of the future through the analysis of financial time series and cross-sectional data that is collected, stored and processed in Information Systems. The output of such models allow financial managers and risk oversight professionals to achieve better outcomes. This review brings the various predictive analytic methods in finance together under one domain

Longitudinal study of first-time freshmen using data mining

In the modern world, higher education is transitioning from enrollment mode to recruitment mode. This shift paved the way for institutional research and policy making from historical data perspective. More and more universities in the U.S. are implementing and using enterprise resource planning (ERP) systems, which collect vast amounts of data. Although few researchers have used data mining for performance, graduation rates, and persistence prediction, research is sparse in this area, and it lacks the rigorous development and evaluation of data mining models. The primary objective of this research was to build and analyze data mining models using historical data to find out patterns and rules that classified students who were likely to drop-out and students who were likely to persist.;Student retention is a major problem for higher education institutions, and predictive models developed using traditional quantitative methods do not produce results with high accuracy, because of massive amounts of data, correlation between attributes, missing values, and non-linearity of variables; however, data mining techniques work well with these conditions. In this study, various data mining models were used along with discretization, feature subset selection, and cross-validation; the results were not only analyzed using the probability of detection and probability of false alarm, but were also analyzed using variances obtained in these performance measures. Attributes were grouped together based on the current hypotheses in the literature. Using the results of feature subset selectors and treatment learners, attributes that contributed the most toward a student\u27s decision of dropping out or staying were found, and specific rules were found that characterized a successful student. The performance measures obtained in this study were significantly better than previously reported in the literature

Case studies in applying data mining for churn analysis

The advent of price and product comparison sites now makes it even more important to retain customers and identify those that might be at risk of leaving. The use of data mining methods has been widely advocated for predicting customer churn. This paper presents two case studies that utilize decision tree learning methods to develop models for predicting churn for a software company. The first case study aims to predict churn for organizations which currently have an ongoing project, to determine if organizations are likely to continue with other projects. While the second case study presents a more traditional example, where the aim is to predict organizations likely to cease being a subscriber to a service. The case studies include presentation of the accuracy of the models using a standard methodology as well as comparing the results with what happened in practice. Both case studies show the significant savings that can be made, plus potential increase in revenue by using decision tree learning for churn analysis

Data Mining with Supervised Instance Selection Improves Artificial Neural Network Classification Accuracy

IDSs may monitor intrusion logs, traffic control packets, and assaults. Nets create large amounts of data. IDS log characteristics are used to detect whether a record or connection was attacked or regular network activity. Reduced feature size aids machine learning classification. This paper describes a standardised and systematic intrusion detection classification approach. Using dataset signatures, the Naive Bayes Algorithm, Random Tree, and Neural Network classifiers are assessed. We examine the feature reduction efficacy of PCA and the fisheries score in this study. The first round of testing uses a reduced dataset without decreasing the components set, and the second uses principal components analysis. PCA boosts classification accuracy by 1.66 percent. Artificial immune systems, inspired by the human immune system, use learning, long-term memory, and association to recognise and v-classify. Introduces the Artificial Neural Network (ANN) classifier model and its development issues. Iris and Wine data from the UCI learning repository proves the ANN approach works. Determine the role of dimension reduction in ANN-based classifiers. Detailed mutual information-based feature selection methods are provided. Simulations from the KDD Cup'99 demonstrate the method's efficacy. Classifying big data is important to tackle most engineering, health, science, and business challenges. Labelled data samples train a classifier model, which classifies unlabeled data samples into numerous categories. Fuzzy logic and artificial neural networks (ANNs) are used to classify data in this dissertation

The Application of Artificial Intelligence in Project Management Research: A Review

The field of artificial intelligence is currently experiencing relentless growth, with innumerable models emerging in the research and development phases across various fields, including science, finance, and engineering. In this work, the authors review a large number of learning techniques aimed at project management. The analysis is largely focused on hybrid systems, which present computational models of blended learning techniques. At present, these models are at a very early stage and major efforts in terms of development is required within the scientific community. In addition, we provide a classification of all the areas within project management and the learning techniques that are used in each, presenting a brief study of the different artificial intelligence techniques used today and the areas of project management in which agents are being applied. This work should serve as a starting point for researchers who wish to work in the exciting world of artificial intelligence in relation to project leadership and management

Technical and Fundamental Features Analysis for Stock Market Prediction with Data Mining Methods

Predicting stock prices is an essential objective in the financial world. Forecasting stock returns and their risk represents one of the most critical concerns of market decision makers. This thesis investigates the stock price forecasting with three approaches from the data mining concept and shows how different elements in the stock price can help to enhance the accuracy of our prediction. For this reason, the first and second approaches capture many fundamental indicators from the stocks and implement them as explanatory variables to do stock price classification and forecasting. In the third approach, technical features from the candlestick representation of the share prices are extracted and used to enhance the accuracy of the forecasting. In each approach, different tools and techniques from data mining and machine learning are employed to justify why the forecasting is working. Furthermore, since the idea is to evaluate the potential of features in the stock trend forecasting, therefore we diversify our experiments using both technical and fundamental features. Therefore, in the first approach, a three-stage methodology is developed while in the first step, a comprehensive investigation of all possible features which can be effective on stocks risk and return are identified. Then, in the next stage, risk and return are predicted by applying data mining techniques for the given features. Finally, we develop a hybrid algorithm, based on some filters and function-based clustering; and re-predicted the risk and return of stocks. In the second approach, instead of using single classifiers, a fusion model is proposed based on the use of multiple diverse base classifiers that operate on a common input and a meta-classifier that learns from base classifiers’ outputs to obtain a more precise stock return and risk predictions. A set of diversity methods, including Bagging, Boosting, and AdaBoost, is applied to create diversity in classifier combinations. Moreover, the number and procedure for selecting base classifiers for fusion schemes are determined using a methodology based on dataset clustering and candidate classifiers’ accuracy. Finally, in the third approach, a novel forecasting model for stock markets based on the wrapper ANFIS (Adaptive Neural Fuzzy Inference System) – ICA (Imperialist Competitive Algorithm) and technical analysis of Japanese Candlestick is presented. Two approaches of Raw-based and Signal-based are devised to extract the model’s input variables and buy and sell signals are considered as output variables. To illustrate the methodologies, for the first and second approaches, Tehran Stock Exchange (TSE) data for the period from 2002 to 2012 are applied, while for the third approach, we used General Motors and Dow Jones indexes.Predicting stock prices is an essential objective in the financial world. Forecasting stock returns and their risk represents one of the most critical concerns of market decision makers. This thesis investigates the stock price forecasting with three approaches from the data mining concept and shows how different elements in the stock price can help to enhance the accuracy of our prediction. For this reason, the first and second approaches capture many fundamental indicators from the stocks and implement them as explanatory variables to do stock price classification and forecasting. In the third approach, technical features from the candlestick representation of the share prices are extracted and used to enhance the accuracy of the forecasting. In each approach, different tools and techniques from data mining and machine learning are employed to justify why the forecasting is working. Furthermore, since the idea is to evaluate the potential of features in the stock trend forecasting, therefore we diversify our experiments using both technical and fundamental features. Therefore, in the first approach, a three-stage methodology is developed while in the first step, a comprehensive investigation of all possible features which can be effective on stocks risk and return are identified. Then, in the next stage, risk and return are predicted by applying data mining techniques for the given features. Finally, we develop a hybrid algorithm, based on some filters and function-based clustering; and re-predicted the risk and return of stocks. In the second approach, instead of using single classifiers, a fusion model is proposed based on the use of multiple diverse base classifiers that operate on a common input and a meta-classifier that learns from base classifiers’ outputs to obtain a more precise stock return and risk predictions. A set of diversity methods, including Bagging, Boosting, and AdaBoost, is applied to create diversity in classifier combinations. Moreover, the number and procedure for selecting base classifiers for fusion schemes are determined using a methodology based on dataset clustering and candidate classifiers’ accuracy. Finally, in the third approach, a novel forecasting model for stock markets based on the wrapper ANFIS (Adaptive Neural Fuzzy Inference System) – ICA (Imperialist Competitive Algorithm) and technical analysis of Japanese Candlestick is presented. Two approaches of Raw-based and Signal-based are devised to extract the model’s input variables and buy and sell signals are considered as output variables. To illustrate the methodologies, for the first and second approaches, Tehran Stock Exchange (TSE) data for the period from 2002 to 2012 are applied, while for the third approach, we used General Motors and Dow Jones indexes.154 - Katedra financívyhově