Stock Price Volatility Prediction: A Case Study with AutoML

Hilal Pataci, Yunyao Li, Yannis Katsis, Yada Zhu, Lucian Popa


Abstract
Accurate prediction of the stock price volatility, the rate at which the price of a stock increases or decreases over a particular period, is an important problem in finance. Inaccurate prediction of stock price volatility might lead to investment risk and financial loss, while accurate prediction might generate significant returns for investors. Several studies investigated stock price volatility prediction in a regression task by using the transcripts of earning calls (quarterly conference calls held by public companies) with Natural Language Processing (NLP) techniques. Existing studies use the entire transcript and this degrades the performance due to noise caused by irrelevant information that might not have a significant impact on stock price volatility. In order to overcome these limitations, by considering stock price volatility prediction as a classification task, we explore several denoising approaches, ranging from general-purpose approaches to techniques specific to finance to remove the noise, and leverage AutoML systems that enable auto-exploration of a wide variety of models. Our preliminary findings indicate that domain-specific denoising approaches provide better results than general-purpose approaches, moreover AutoML systems provide promising results.
Anthology ID:
2022.finnlp-1.6
Volume:
Proceedings of the Fourth Workshop on Financial Technology and Natural Language Processing (FinNLP)
Month:
December
Year:
2022
Address:
Abu Dhabi, United Arab Emirates (Hybrid)
Editors:
Chung-Chi Chen, Hen-Hsen Huang, Hiroya Takamura, Hsin-Hsi Chen
Venue:
FinNLP
SIG:
Publisher:
Association for Computational Linguistics
Note:
Pages:
48–57
Language:
URL:
https://aclanthology.org/2022.finnlp-1.6
DOI:
10.18653/v1/2022.finnlp-1.6
Bibkey:
Cite (ACL):
Hilal Pataci, Yunyao Li, Yannis Katsis, Yada Zhu, and Lucian Popa. 2022. Stock Price Volatility Prediction: A Case Study with AutoML. In Proceedings of the Fourth Workshop on Financial Technology and Natural Language Processing (FinNLP), pages 48–57, Abu Dhabi, United Arab Emirates (Hybrid). Association for Computational Linguistics.
Cite (Informal):
Stock Price Volatility Prediction: A Case Study with AutoML (Pataci et al., FinNLP 2022)
Copy Citation:
PDF:
https://aclanthology.org/2022.finnlp-1.6.pdf
Video:
 https://aclanthology.org/2022.finnlp-1.6.mp4