[KSCI] Korea Science Citation Index Service

http://dx.doi.org/10.21219/jitam.2015.22.3.001

A Selective Induction Framework for Improving Prediction in Financial Markets

Kim, Sung Kun (Information Systems, School of Business, Chung-Ang University)

Publication Information

Journal of Information Technology Applications and Management / v.22, no.3, 2015 , pp. 1-18 More about this Journal

Abstract

Financial markets are characterized by large numbers of complex and interacting factors which are ill-understood and frequently difficult to measure. Mathematical models developed in finance are precise formulations of theories of how these factors interact to produce the market value of financial asset. While these models are quite good at predicting these market values, because these forces and their interactions are not precisely understood, the model value nevertheless deviates to some extent from the observable market value. In this paper we propose a framework for augmenting the predictive capabilities of mathematical model with a learning component which is primed with an initial set of historical data and then adjusts its behavior after the event of prediction.

Keywords

Induction; Financial Markets; Option Pricing; Incremental Learning;

Citations & Related Records

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