PSI 20 Index Forecast - Naive Prediction

PSI20 Index   6,571  50.98  0.78%   
The Naive Prediction forecasted value of PSI 20 Stock on the next trading day is expected to be 6,553 with a mean absolute deviation of 41.46 and the sum of the absolute errors of 2,570. Investors can use prediction functions to forecast PSI 20's index prices and determine the direction of PSI 20 Stock's future trends based on various well-known forecasting models. However, exclusively looking at the historical price movement is usually misleading.
Most investors in PSI 20 cannot accurately predict what will happen the next trading day because, historically, index markets tend to be unpredictable and even illogical. Modeling turbulent structures requires applying different statistical methods, techniques, and algorithms to find hidden data structures or patterns within the PSI 20's time series price data and predict how it will affect future prices. One of these methodologies is forecasting, which interprets PSI 20's price structures and extracts relationships that further increase the generated results' accuracy.
A naive forecasting model for PSI 20 is a special case of the moving average forecasting where the number of periods used for smoothing is one. Therefore, the forecast of PSI 20 Stock value for a given trading day is simply the observed value for the previous period. Due to the simplistic nature of the naive forecasting model, it can only be used to forecast up to one period.

PSI 20 Naive Prediction Price Forecast For the 20th of June

Given 90 days horizon, the Naive Prediction forecasted value of PSI 20 Stock on the next trading day is expected to be 6,553 with a mean absolute deviation of 41.46, mean absolute percentage error of 2,718, and the sum of the absolute errors of 2,570.
Please note that although there have been many attempts to predict PSI Index prices using its time series forecasting, we generally do not recommend using it to place bets in the real market. The most commonly used models for forecasting predictions are the autoregressive models, which specify that PSI 20's next future price depends linearly on its previous prices and some stochastic term (i.e., imperfectly predictable multiplier).

PSI 20 Index Forecast Pattern

PSI 20 Forecasted Value

In the context of forecasting PSI 20's Index value on the next trading day, we examine the predictive performance of the model to find good statistically significant boundaries of downside and upside scenarios. PSI 20's downside and upside margins for the forecasting period are 6,552 and 6,554, respectively. We have considered PSI 20's daily market price to evaluate the above model's predictive performance. Remember, however, there is no scientific proof or empirical evidence that traditional linear or nonlinear forecasting models outperform artificial intelligence and frequency domain models to provide accurate forecasts consistently.
Market Value
6,571
6,553
Expected Value
6,554
Upside

Model Predictive Factors

The below table displays some essential indicators generated by the model showing the Naive Prediction forecasting method's relative quality and the estimations of the prediction error of PSI 20 index data series using in forecasting. Note that when a statistical model is used to represent PSI 20 index, the representation will rarely be exact; so some information will be lost using the model to explain the process. AIC estimates the relative amount of information lost by a given model: the less information a model loses, the higher its quality.
AICAkaike Information Criteria127.8559
BiasArithmetic mean of the errors None
MADMean absolute deviation41.4585
MAPEMean absolute percentage error0.0063
SAESum of the absolute errors2570.4254
This model is not at all useful as a medium-long range forecasting tool of PSI 20 Stock. This model is simplistic and is included partly for completeness and partly because of its simplicity. It is unlikely that you'll want to use this model directly to predict PSI 20. Instead, consider using either the moving average model or the more general weighted moving average model with a higher (i.e., greater than 1) number of periods, and possibly a different set of weights.

Predictive Modules for PSI 20

There are currently many different techniques concerning forecasting the market as a whole, as well as predicting future values of individual securities such as PSI 20 Stock. Regardless of method or technology, however, to accurately forecast the index market is more a matter of luck rather than a particular technique. Nevertheless, trying to predict the index market accurately is still an essential part of the overall investment decision process. Using different forecasting techniques and comparing the results might improve your chances of accuracy even though unexpected events may often change the market sentiment and impact your forecasting results.
Sophisticated investors, who have witnessed many market ups and downs, anticipate that the market will even out over time. This tendency of PSI 20's price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy.

Other Forecasting Options for PSI 20

For every potential investor in PSI, whether a beginner or expert, PSI 20's price movement is the inherent factor that sparks whether it is viable to invest in it or hold it better. PSI Index price charts are filled with many 'noises.' These noises can hugely alter the decision one can make regarding investing in PSI. Basic forecasting techniques help filter out the noise by identifying PSI 20's price trends.

PSI 20 Related Equities

One of the popular trading techniques among algorithmic traders is to use market-neutral strategies where every trade hedges away some risk. Because there are two separate transactions required, even if one position performs unexpectedly, the other equity can make up some of the losses. Below are some of the equities that can be combined with PSI 20 index to make a market-neutral strategy. Peer analysis of PSI 20 could also be used in its relative valuation, which is a method of valuing PSI 20 by comparing valuation metrics with similar companies.
 Risk & Return  Correlation

PSI 20 Stock Technical and Predictive Analytics

The index market is financially volatile. Despite the volatility, there exist limitless possibilities of gaining profits and building passive income portfolios. With the complexity of PSI 20's price movements, a comprehensive understanding of forecasting methods that an investor can rely on to make the right move is invaluable. These methods predict trends that assist an investor in predicting the movement of PSI 20's current price.

PSI 20 Market Strength Events

Market strength indicators help investors to evaluate how PSI 20 index reacts to ongoing and evolving market conditions. The investors can use it to make informed decisions about market timing, and determine when trading PSI 20 shares will generate the highest return on investment. By undertsting and applying PSI 20 index market strength indicators, traders can identify PSI 20 Stock entry and exit signals to maximize returns.

PSI 20 Risk Indicators

The analysis of PSI 20's basic risk indicators is one of the essential steps in accurately forecasting its future price. The process involves identifying the amount of risk involved in PSI 20's investment and either accepting that risk or mitigating it. Along with some essential techniques for forecasting psi index prices, we also provide a set of basic risk indicators that can assist in the individual investment decision or help in hedging the risk of your existing portfolios.
Please note, the risk measures we provide can be used independently or collectively to perform a risk assessment. When comparing two potential investments, we recommend comparing similar equities with homogenous growth potential and valuation from related markets to determine which investment holds the most risk.

Also Currently Popular

Analyzing currently trending equities could be an opportunity to develop a better portfolio based on different market momentums that they can trigger. Utilizing the top trending stocks is also useful when creating a market-neutral strategy or pair trading technique involving a short or a long position in a currently trending equity.