Role of Data Mining in Stock Market and Investment Analysis

ROLE OF DATA MINING IN STOCK MARKET AND INVESTMENT ANALYSIS (2007

EXECUTIVE SUMMARY

Data mining plays a prominent role in adding organization to discover hidden data that are useful for the effective operations of organization in modern competitive world . Data mining and alongside with other business intelligence tools like data warehouse , OLAP , Queries are basic tools for planning for business organizations For operations in the stock market , data mining aids in the prediction , visualizing and goes a long way to safeguard the investment in stock against fraud . To maximize the advantage

associated with using data mining in stock market operations there should be a build pattern followed to implement and utilized gained knowledge for effective operation . The adopted pattern should be one that is clear and applied in a sequential manner . There are drawbacks in the operations of data mining . These drawbacks includes the wrong application and adoption of the data mining process , which tends to make the whole effort a futile and wasted one . Furthermore the basic knowledge of advance statistical application is needed for an effective data mining and operation of software that would bring the effective results to the task in stock market that data mining is applied

INTRODUCTION

In contemporary business world , the need to be adequately equipped with the right information is germane for an effective performance and operation . The generation of information and using such as the right time enables adequate planning and forecasting . Hidden data about how to plan for an organization customers market research on customers behavior and buying pattern credit cards and insurance fraud detection and financial planning , these are made available for planners and data miners for effective use . The stock market operates in the sales of shares and other stocks like bonds , securities and other financial instruments . The activities of stock operators brokers , jobbers etc are based on forecasting on the fluctuation of share prices and making predictions on the outcome of prices of stocks . Such activities require adequate reliable data for effective operations . Thus , data mining plays a significant role in the operations of the stock market

This write up would give the importance and role data mining plays in the operations of stock market , and their relevance to contemporary business would be analyzed

CONCEPTUALIZATION OF TERMS

Data Mining involves a process of developing raw untapped database which is germane for effective problem solving and planning . The discovery and utilization of this untapped database gives the users of the database the ability to make effective forecasting and planning Thearling (1995 ) defines Data Mining that it is a process of extracting information from a data that user did not know existed . It becomes advantageous to the organization carrying out the data mining process since it is a much bigger leap to take the output of the system and translate it into a solution to a business problem (ibid . To , LIS (2001 , Data mining is synonymous to knowledge discovery in databases Knowledge discovery in databases entails a process of identifying...