A Comparative Study of Machine Learning Algorithms for Stock Price Prediction Using Insider Trading Data

• URL: http://arxiv.org/abs/2502.08728v1
• Date: Wed, 12 Feb 2025 19:03:09 GMT
• Title: A Comparative Study of Machine Learning Algorithms for Stock Price Prediction Using Insider Trading Data
• Authors: Amitabh Chakravorty, Nelly Elsayed,
• Abstract summary: The research paper empirically investigates several machine learning algorithms to forecast stock prices depending on insider trading information. This study examines the effectiveness of algorithms like decision trees, random forests, support vector machines (SVM) with different kernels, and K-Means Clustering. The results of this paper aim to help financial analysts and investors in choosing strong algorithms to optimize investment strategies.
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• Abstract: The research paper empirically investigates several machine learning algorithms to forecast stock prices depending on insider trading information. Insider trading offers special insights into market sentiment, pointing to upcoming changes in stock prices. This study examines the effectiveness of algorithms like decision trees, random forests, support vector machines (SVM) with different kernels, and K-Means Clustering using a dataset of Tesla stock transactions. Examining past data from April 2020 to March 2023, this study focuses on how well these algorithms identify trends and forecast stock price fluctuations. The paper uses Recursive Feature Elimination (RFE) and feature importance analysis to optimize the feature set and, hence, increase prediction accuracy. While it requires substantially greater processing time than other models, SVM with the Radial Basis Function (RBF) kernel displays the best accuracy. This paper highlights the trade-offs between accuracy and efficiency in machine learning models and proposes the possibility of pooling multiple data sources to raise prediction performance. The results of this paper aim to help financial analysts and investors in choosing strong algorithms to optimize investment strategies.

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