Analyzing and Predicting Financial Time Series Data Using Recurrent Neural Networks
DOI:
https://doi.org/10.5281/zenodo.12786717ARK:
https://n2t.net/ark:/40704/JIEAS.v2n4a03Keywords:
Financial Time Series Prediction, Recurrent Neural Networks, Long Short-Term Memory Networks, LSTM, Time Series Analysis, Deep Learning, ARIMA, GARCH, Stock Price Prediction, Exchange Rate Forecasting, Volatility Modeling, Machine Learning in Finance, Data Preprocessing, Hyperparameter Tuning, Prediction Accuracy, Financial Forecasting, Sequential Data Modeling, Bidirectional LSTM, Technical indicatorsAbstract
Financial time series data, characterized by its inherent complexity and volatility, presents significant challenges for accurate prediction. Traditional statistical models often fall short in capturing the intricate patterns and dependencies within the data. Recurrent Neural Networks (RNNs), particularly Long Short-Term Memory (LSTM) networks, offer a promising solution by leveraging their ability to learn temporal dependencies and complex sequences. This paper explores the application of RNNs in analyzing and predicting financial time series data, examining their effectiveness, implementation challenges, and potential benefits. Specifically, we investigate the architecture of RNNs, the role of LSTM in mitigating issues such as the vanishing gradient problem, and the impact of hyperparameter tuning on model performance. Comprehensive experiments demonstrate the superiority of RNNs over traditional models, highlighting their potential to transform financial forecasting by improving prediction accuracy, adapting to dynamic market conditions, and reducing the need for extensive feature engineering.
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