Bayesian Hierarchical Modeling for Stock Price Forecasting: Evidence from Apple Inc. (AAPL)
DOI:
https://doi.org/10.61173/d4k3c074Keywords:
Bayesian hierarchical modeling, stochastic volatility, stock return forecasting, predictive densities, uncertainty quantificationAbstract
Stock price forecasting has long been a significant research topic in finance, and the stock market has grown increasingly popular in recent years. As a popular saying goes, “even the aunts in the vegetable market are speculating on stocks.” In a rapidly changing market environment, investors need more reliable forecasting tools to assist in decision-making. Traditional prediction methods often struggle to cope with the complexity and uncertainty of the market, whereas Bayesian statistical methods offer new possibilities in this field due to their unique probabilistic framework. This study takes Apple (AAPL) as an example to explore the application of Bayesian methods in stock price prediction. We have collected the company’s historical transaction data from 2015 to 2023, including key indicators such as daily opening price, closing price and trading volume. By establishing a Bayesian hierarchical model, we try to capture the inherent laws of stock price fluctuations. The study found that the Bayesian method can better deal with uncertainty in the stock market.
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