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.

Explore Investing Opportunities

You can quickly originate your optimal portfoio using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.

Did you try this?

Run Portfolio Analyzer Now

   

Portfolio Analyzer

Portfolio analysis module that provides access to portfolio diagnostics and optimization engine
All  Next Launch Module
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

Other Complementary Tools

Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
FinTech Suite
Use AI to screen and filter profitable investment opportunities
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
ETFs
Find actively traded Exchange Traded Funds (ETF) from around the world
Sectors
List of equity sectors categorizing publicly traded companies based on their primary business activities
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like