Unknown Indicator

A naive forecasting model for equity instruments is a special case of the moving average forecasting where the number of periods used for smoothing is one. Therefore, the forecast of price 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.
This model is not at all useful as a medium-long range forecasting tool of price. 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 equity instruments. 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.

Naive Prediction In A Nutshell

When using the naïve prediction, it is good for only a time series. Knowing how to compare and use data is important because there are hundreds upon hundreds of ways to analyze data and you have to be sure you are effectively analyzing the data.

If you find yourself looking at data, using naïve prediction is typically used as the benchmark predication, and takes previous data and does not alter it, allowing you to use other prediction models against it to see how they are doing.

Closer Look at Naive Prediction

Another aspect to look using naïve prediction is there could be seasonality in the market you are examining and this approach may not be the best to use. There are other factors to keep in mind such as drift and a shift in the average.

These are in depth formulas that can be manipulated and changed, but it is important to understand what goes into the equation because with that you can narrow in on the specific data that may be altering the results. There are many different resources to use on the Internet so be sure to fully understand what is happening before using this in your current setup. Join an investing group and see if other people are using this as you may find it is not widely used due to a various of reasons. Also, check out Macroaxis as there are many useful tools that can help expand your current trading setup.

Trending Themes

If you are a self-driven investor, you will appreciate our idea-generating investing themes. Our themes help you align your investments inspirations with your core values and are essential building blocks of your portfolios. A typical investing theme is an unweighted collection of up to 20 funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of equities with common characteristics such as industry and growth potential, volatility, or market segment.
Cannabis Idea
Cannabis
Invested over 500 shares
Macroaxis Index Idea
Macroaxis Index
Invested over 10K shares
Check out your portfolio center.
Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

Other Complementary Tools

Global Correlations
Find global opportunities by holding instruments from different markets
Equity Valuation
Check real value of public entities based on technical and fundamental data
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Latest Portfolios
Quick portfolio dashboard that showcases your latest portfolios
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Fundamental Analysis
View fundamental data based on most recent published financial statements
Content Syndication
Quickly integrate customizable finance content to your own investment portal