- 1 Project Overview
- 2 Design & Solutions
- 3 Results
The financial market is an extremely complicated place. While there are many metrics used to measure the health of markets, market values such as the S&P 500, Russell 2000, and the Dow Jones Industrial average are the ones that we will focus on. We will build models of the market so that users can input how they think the interest rate, unemployment rate, price of gold, and other factors will change, and our models will predict how the market will react to those changes. The user will enter their predictions into a user interface, and the product will output visual aid as well as estimated prices and behavior. Our product will help users make more informed investment decisions.
- Brandt Lawson
- Keith Kamons
- Chang Xue (TA)
Produce a user interface which, given a user specified value for some factors, can predict what impact this change will have on future index values. The accuracy and precision of the model can be determine through back testing and measure the success of the project. We will demonstrate our project by allowing users to predict changes in many factors and to see how our model does at predicting the markets reaction.
- Learning how to use MySQL.
- The web security behind sharing data online and how to accomplish this in a safe and secure way.
- Learning how to use Python's data analysis toolboxes.
- Nobody in the group has taken a course or studied how many of the analysis tools and underlying math and computer science works, so it will be incredibly challenging to figure it all out along the way.
- Integrating this software across different platforms and allowing everyone in the group to have access to this data.
- Data collection and storage in an efficient and complete way
- Collecting data in an autonomous and dynamic way will be a challenge due to the ways that resources such as Google Finance, Yahoo Finance and Quandl change their policies on data collection.
- Manual data collection and cleaning while the code for autonomous collection and analysis is setup.
Our goal is to exclusively use open source data and software, which makes our budget $0.00.
In order to enable our data set to dynamically update, we must create code that will "scrape" the newest information from the specified website.
Once this new data is scraped, we will add it to our relational database using SQL. This will make it more organized and easily searchable.
Design & Solutions
The Data Management
Originally planned to have data scrapped from the web to enable live updates and stored into a database.
Then used Bloomberg Terminal for collecting and exporting data.
Determine which data needs to be pulled. Data Cleaning
The Statistical Analysis
The Graphical User Interface
Comparison to Objectives
Our project met our basic objectives and goals. We successfully created a user interface that allows users to predict values for certain factors and to calculate the effect these changes will have on future values of an index. The interface outputs a visual aid to display behavior as well as a specific estimate for the price. Additionally, we included a feature that allows the user to specify the number of days ahead they wish to predict the values of the index.
After meeting out basic goals, we hoped to potentially model several different market indexes instead of just the S&P 500, such as the Russel 2000 and the Dow Jones Industrial Average. We also used different factors for analysis than originally mentioned, but this did not impact the success of the project. The factors we used were the US Dollar to Euro currency exchange rate, gross domestic product, nonfarm payroll, 3 month libor, and the unemployment rate compared to interest rate, price of gold, and unemployment rate. The interface allows the user to select a combination of the possible factors and creates a reasonable prediction given the factors and the amount of change predicted. The visual aid properly depicts the prediction given these changes as well as showing the past values of the index. We intended for the display to be embedded inside of the user interface, however after facing difficulties at updating the plot, we settled on having the plot pop up in a new window.
Source Code: GitHub
We would have liked to have a dynamic data feed for live updating of the data, however the websites we attempted to scrape the data from blocked us. To obtain our data, we resorted to using the Bloomberg Terminal, which was static data.
To expand the usability of our project, we would implement more market indexes as well as implement more features. We would also use dynamic data feed to allow the data to have live updates and be up to date to what is currently happening in the market.