Sou.

Sushila Danchand Ghodawat Charitable Trust’s

Sanjay Ghodawat Group of Institutions

Synopsis
On

“Stock Market Prediction Using Machine Learning Techniques”

By

Name Roll No.

Mr. Rahul N. Kamble 10

Mr. Omkar G. Kolekar 15

Mr. Pravin K. Mallya 16

Mr. Aditya A. Joshi 17

Mr. Shubham D. Jadhav 21

UNDER THE GUIDANCE OF

Mrs. D. V. Patil

Department of Computer Science and Engineering

2019-2020
1. Introduction

Nowadays, as the connections between worldwide economies are tightened by globalization,

external disturbances to the financial markets are no longer domestic. With evolving capital
markets, more and more data is being created daily.

The intrinsic value of a company’s stock is the value determined by estimating the expected
future cash flows of a stock and discounting them to the present, which is known as the book
value. This is distinct from the market value of the stock, that is determined by the company’s
stock price. This market value of a stock can deviate from the intrinsic value due to reasons
unrelated to the company’s fundamental operations, such as market sentiment.

The fluctuation of stock market is violent and there are many complicated financial
indicators. Only few people with good experience and knowledge can understand the
meaning of the indicators and use them to make good prediction to get profit. Most people
have to rely solely on luck to earn money from stock trading. However, the advancement in
technology, provides an opportunity to gain steady fortune from stock market and also can
help experts to find out the most informative indicators to make better prediction. The
prediction of the market value is vital to help in maximizing the profit of stock option
purchase while keeping the risk low.

2. Existing Problems

• Most people don’t know relationship among all financial assets.

• It is difficult to predict what drives the price of each asset.
• It is difficult to find link between financial assets and the real economy.
3. Literature Survey
Due to globalization of economies, the financial personnel are looking to invest in multiple
companies. The stock market provides a huge platform for shareholders and businessmen to
find new investors. But there’s a catch, there are tremendous amounts of factors which have
more or less effect on the stock market. Hence, it becomes difficult for investors to take
decisions and invest in stock which has a better future leading to profit. Existing solutions for
market predictions are not that much trustworthy. So, there is scope to improvement in this
field.

From survey, it was observed that the application of machine learning techniques to stock
market prediction is being undertaken thoroughly throughout the world.
Machine Learning techniques are proving to be much more accurate and faster as compared to
contemporary prediction techniques. This solution will make further improvement to stock
prediction using new techniques. Through the use of a Training algorithm.

4. Problem Definition
The aim of the project is to examine a number of different forecasting techniques to predict
future stock returns based on past returns and numerical news indicators to construct a
portfolio of multiple stocks in order to diversify the risk. We do this by applying supervised
learning methods for stock price forecasting by interpreting the seemingly chaotic market
data.

5. Objective
• To examine a number of different forecasting techniques to predict future stock returns
based on past returns.
• To provide a platform where stock movements of the major companies are displayed.
• To determine values that particular will have in near future.
• To determine month’s high and low with the help of machine learning algorithms.
• To providing notifications of rising and falling stocks.
6. Problem Methodology
1. Preprocessing and Cleaning:

Interpolating or recovering the missing data and removing the redundant data. This step
also involves creating any useful feature from the existing ones.

2. Feature Extraction:

This step involves searching in the space of possible feature subsets. We then pick the
subset that is optimal or near-optimal with respect to some objective function. This is
done so as to avoid problems of overfitting/underfitting the dataset.

3. Data Normalization:

Data is needed to be normalized for better accuracy by ensuring that all features are not
given excessive/low weightage.

4. Analysis of various supervised learning methods:

a. Classification Methods

This phase would involve supervised classification methods like Support Vector
Machines, Neural Networks, Naive Bayes, Ensemble classifiers (like Adaboost, Random
Forest Classifiers), etc.
 b. Regression Methods

These models would be used to get the expected numerical value of the interested stock.
This phase would involve supervised regressions methods like Linear Regressions,
Support Vector Regressions, Usage of Kernel Methods, etc.

5. Social Media Sentiment Analysis:

Analyzing the current market situation from the latest news headlines and social media
platform such as Twitter to gain insights into the future of stock prices.

6. Credit Assignment Problem:

This step involves the assigning of appropriate weightage to different ways used for data
collection.
 7. Analysis of Different Models:

Comparison between the various methods and models implemented over the datasets.
projected test element by projecting it into face space and comparing to training

7. Flow chart

Training Data

Pre-processing

Construct ML models
using algorithm

Test Data Prediction using ML

models Yes
Input

Compare
Test Data with actual
Output and calculate
error

NO

Model
8. Requirement

1. Hardware-
• Personal computer with standard configuration.

• Processor: i3 or any higher

• Memory:1TB

• RAM:4GB

2. Software:
1. Python
2. MySQL database

9. Conclusion

Stock markets are not easy to predict. So, using machine learning techniques we can predict
stock market prices which will help investors to make decisions.

10. References

https://www.investopedia.com/terms/s/stock.asp
https://www.kaggle.com/borismarjanovic/price-volume-data-for-all-us-stocks-etfs
https://en.wikipedia.org/wiki/Stock_market_prediction

Mrs. D. V. Patil Mr. S. S. More Dr. A. M. Chougule

Project Guide Coordinator HOD CSE