Dow Jones Index Forecast - Naive Prediction

A naive forecasting model for Dow Jones is a special case of the moving average forecasting where the number of periods used for smoothing is one. Therefore, the forecast of Dow Jones Industrial 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.

Dow Jones Naive Prediction Price Forecast For the 1st of December

Given 90 days horizon, the Naive Prediction forecasted value of Dow Jones Industrial on the next trading day is expected to be 45,028 with a mean absolute deviation of 344.33, mean absolute percentage error of 192,623, and the sum of the absolute errors of 21,348.

Dow Jones Index Forecast Pattern

Dow Jones Forecasted Value

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 Dow Jones index data series using in forecasting. Note that when a statistical model is used to represent Dow Jones 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. This model is not at all useful as a medium-long range forecasting tool of Dow Jones Industrial. 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 Dow Jones. 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 Dow Jones

There are currently many different techniques concerning forecasting the market as a whole, as well as predicting future values of individual securities such as Dow Jones Industrial. 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.

Other Forecasting Options for Dow Jones

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

Dow Jones Related Equities

Risk & Return

Correlation

Dow Jones Industrial 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 Dow Jones' 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 Dow Jones' current price.

Dow Jones Market Strength Events

Dow Jones Risk Indicators

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.