Here’s What Predicting Apple’s Stock Price Using NLP Taught Me About Exxon Mobil’s Stock
An investigation into NLP using sentiment analysis to predict Exxon Mobil’s stock price movements
In late June 2020, I started a project to predict the stock market’s movement using Natural Language Processing (NLP). Stock market prediction refers to the act of attempting to determine the future value of a company’s stock that is traded on an exchange. Predicting the stock market, especially actual stock prices, turns out to be quite difficult, and this is so for several reasons. A major reason is that past performance is not necessarily a good indicator of future success. Simply put, what this means is that if a stock’s price increased by 2% two days ago, 4% yesterday, and 6% today, it does not imply that the price will increase by 8% tomorrow. In fact, it is very plausible that that stock’s value can decrease by 20%.
Another major point to consider is that there are many factors which can affect a stock’s price and a model which accounts for all of these factors will most likely produce poor predictions. Even if one were to develop such a model successfully, the mere fact that we can now accurately predict a stock’s price will influence the stock’s price. Thus, again resulting in less than ideal results…
