The Stock Prices Prediction Performance of Hidden Markov Models in the Luxury Category

Abstract

The stock market is the place where issued stocks are transferred, traded and circulated, including exchange market and over-the-counter market. Because it is based on the issuance market, it is also called the secondary market. The structure and trading activities of the stock market are more complex than the issuance market (the primary market), and its role and influence are also greater. It is precisely because of its complex systems and processes that achieving accurate predictions is very difficult and challenging. The Hidden Markov Model is not a commonly used model in predicting the next day's stock price. Hence, I will focus on the Hidden Markov Model with four luxury giants to prove whether the HMM is suitable for that industry, and which company fitted most.