LLM-StockMarketAnalysis

Introduction

Financial news articles play a crucial role in driving stock market trends, often triggering swift market reactions. By capitalizing on the speed of artificial intelligence in processing and reacting to these news articles, an advantage can be gained in navigating the stock market. This research investigates this premise, hypothesizing that the integration of news articles and stock price history can effectively predict market movements. Utilizing Wolfram Language and large language models GPT-2 and BERT, we developed and trained a series of classifiers, leveraging the text from news headlines and historical stock prices as inputs. Our results indicate that the incorporation of financial news does indeed enhance the prediction accuracy, with the model that merges GPT2 embeddings and stock price history delivering the best performance. Future work aims to fine-tune this approach by adjusting the historical data length and prediction horizon, and incorporating bid-ask spreads, with the ultimate goal of creating a practical tool that can anticipate market trends swiftly and accurately based on the combined influence of financial news and stock price history. Large Language Models (LLMs) are made of artificial neural networks associated with millions or billions of parameters and trained on massive amounts of data — whether it’s self-supervised learning or semi-supervised learning techniques — to understand and reiterate information. The financial industry has started to leverage these tools for a variety of reasons, including predicting the stock market, financial education, economic advisory, trading strategies, sentiment analysis, and risk management. With the technological advances brought on by ChatGPT, BloombergGPT and FinGPT were developed specifically for the finance sector. All three LLMs have the potential to make an impact on the financial sector.

References:

• https://www.enterpriseai.news/2023/06/29/predicting-the-financial-market-with-large-language-models/
• https://www.theregister.com/2023/04/18/large_language_models_like_chatgpt/
• https://community.wolfram.com/groups/-/m/t/2959055