Proceedings of the International Conference on Artificial Intelligence and Smart Systems (ICAIS-2021)
IEEE Xplore Part Number: CFP21OAB-ART; ISBN: 978-1-7281-9537-7
Correlation analysis of financial indicators and stock
price fluctuations based on artificial intelligence
system
2021 International Conference on Artificial Intelligence and Smart Systems (ICAIS) | 978-1-7281-9537-7/20/$31.00 ©2021 IEEE | DOI: 10.1109/ICAIS50930.2021.9395944
Shu Chen
Liaoning Jianzhu Vocational College, School of Financial Management, Liaoyang, China
Chenshu21@mail.com
Abstract— Correlation analysis of the financial indicators and
stock price fluctuations based on artificial intelligence system. In
GANs artificial neural network, the number of GANs artificial
neurons in the middle layer is required to be the same as the
number of training samples, and each GANs artificial neuron
stores one training sample, which is called direct memory
artificial neuron. The adjustment of connection weights more
accurately approximates the nonlinear mapping relationship
reflected in the stock market price fluctuations, so as to realize
the short-term accurate prediction of the stock market price.
This research work has designed the novel neural network model
to construct the ideas of the prediction model. Compared with
the state-of-the-art ways, the performance is satisfactory.
Keywords— Artificial intelligence; financial indicators; stock
price; data mining; systematic design
I. INT RODUCT ION
The stock market is the fu zzy environ ment full of many
uncertain factors. The existence of these uncertain factors
makes people face various risks when investing in securit ies.
The analysis methods that people have successively proposed
include basic analysis, technical analysis and also time series
analysis. The stock market is a very co mplex system, which is
affected by economic, policy and market factors. For such a
complex dynamic nonlinear system, many researchers use the
neural networks to predict stock prices [1-3].
methods have been proposed. The research on the nonlinear
prediction methods is in the ascendant, and the neural network
method has attracted more attention. Neural networks with
nonlinear hidden neurons have the very good application
prospects in stock market forecasting. This is because neural
networks with nonlinear h idden neurons have the ability to
approximate any nonlinear continuous function [4-5].
The adjustment of connection weights more accurately
approximates the nonlinear mapping relationship reflected in
the stock market price fluctuations, so as to realize the short-
term accurate pred iction of the stock market price. The stock
data is then imported into the eight database system, and the
database data is extracted, cleaned, and aggregated according
to various needs during data min ing, and then imported into
data warehouse to complete the data warehouse preparation.
The neural network system is used to complete the short-term
trend prediction of indexes, sectors and individual stocks [6].
The data mining clustering engine uses various strategies
provided by users to perform the cluster analysis on stocks to
obtain different clusters. The user finally obtains interesting
and satisfactory clusters, and the analysis results are output in
a graphical interface or document can directly use historical
data to make short-term predictions for index and individual
stock trends in the neural network system. In the following
sub-sections, we will design the model and simulations.
II. T HE PROPOSED MET HODOLOGY
A. The Financial Indicators for Prediction
The newly developed behavioral finance tries to explain
stock price fluctuations with the "spontaneous power" of the
investors. Behavioral finance theory has well achieved great
success in explaining the puzzle of stock price fluctuations in
the securities markets of western developed countries [7-9].
1  exp  a ˜ log  q / p  
f0
Fig. 1. T he Neutal Network Summary
Asdemonstrated in the figure 1, neutal network summary
is shown. To solve this problem, many latest stock prediction
exp  b ˜ log  q / p    exp  a ˜ log  q / p  
(1)
In the formu la 1, we define the in itial point for the analysis
of the data. For the selection of the fators, the listed are the
essential aspects for the analysis [10-12].
(1) A clear property right system and a sound corporate
governance structure are the basis for the co mpany’s equity
incentive system to achieve the constraints on operators by

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 Proceedings of the International Conference on Artificial Intelligence and Smart Systems (ICAIS-2021)
IEEE Xplore Part Number: CFP21OAB-ART; ISBN: 978-1-7281-9537-7

establishing and improving the mutual checks and balances of through factor analysis. Transform a relatively large number
the company’s relevant stakeholders. of original variab les that are related to each other into a set of
(2) The market selection mechanism of executives can relatively small and independent common factors, that is, to
guarantee the quality of executives and have the long -term project many related indicators in several main d imensions. In
constraint on the behavior of senior executives. It can restrain the figure 3, the prediction model test is presented.
the managers by displaying their reputation information and
market-oriented selection mechanism.
(3) Through laws, regulations, management system and
other forms to provide policy support for the formation and
strengthening of various mechanisms to create a good policy
environment for effect iveness of equity incentive mechanis m.
In the figure 2, we show the AI assisted system.

Fig. 3. T he Prediction Model Robustness

B. The Data Mining Models Considered

At present, the methods of the stock prediction research
through deep learning are roughly divided into the following
categories: use the powerful feature extraction and recognition
capabilit ies of the CNN to judge the rise and fall and construct
timing strategies; put rich data features into RNN for learning;
use data mining technology that analyzes network informat ion
Fig. 2. T he Financial Indicators with AI System
resources to obtain relevant signals that affect the stock market.
In addition. Most of the indicators related to liquidity are
also the result of empirical estimat ion. To a certain extent, the In the formula 1, we present the objective function [16].
higher the current ratio and quick ratio, the better the liquidity
wL f U ,V 
of the co mpany and the higher the solvency. However, this
indicator is too high and shows that the company's funds are
not being used well. Reduce the operational efficiency of the
enterprise. For estimation, formula 2 defines the principles.
¦
2
x arg max ( xT guv )
x 1 (u ,v)Cij
(2)
The basic assumption of this article is that the news of the
expected stock price changes has not been announced to
calculate the impact o f the policy release on the co mpany's
value and use the market model to estimate each co mpany as
shown below [13-15].
min ¦ n
N
xn  f ( zn )  P zn  h( xn )
2 2
1
h, f , Z
VW zn {0,1}L , n 1,..., N (3)
There are many factors that affect stock price fluctuations,
so the measurement model we use is not accurate. In order to
fix other factors that affect stock price fluctuations, we follow
the principles of industry classification in the selection of the
samples. In order to co mprehensively and also systematically
reflect the financial status of the enterprise. It is necessary to
select as many important indicators as possible that can reflect
the financial situation of the enterprise. But these financial
indicators have many names, wh ich increase the co mplexity of
the problem, and because each indicator reflects financial
information to varying degrees.
Therefore, there will be a certain correlation between the
indicators. thus. The idea of basic dimensionality reduction
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mwi uijm1 D  xi ,V j   wi Oi
2
0
wuij
(4)
The echo SVM support vector mach ine algorith m is used
to predict the rise and fall o f stocks. Because the algorith m
performs well in classificat ion and regression problems, it has
strong generalization ab ility and overco mes the shortcomings
of neural networks that are easy to overfit . Research shows
that the selection of the variable characteristics is an important
part of improving stock prediction results.
In general understanding, shareholders tend to think that
there is the strong linkage between the stock prices of several
listed companies of the same parent company. However, there
is a lot of noise in stock data, which makes it difficult for the
general linear classificat ion method to then achieve the better
prediction results. Therefore, the idea of predict ing stock price
derives two kinds: one is the idea of feature expansion, taking
into account as much as possible the factors of stock price
lin kage, and the other is the idea of the feature streamlining,
which only retains important features for analysis [17].
The data min ing clustering engine in the data min ing and
neural network pred iction model adopts the certain min ing
strategy to perform cluster analysis on all stocks or stocks in
the sector, and then selects general training samp les fro m the
clustered stocks according to the certain proportion. Network
system for the training. Thereby reducing the noise of train ing
samples and imp roving the generalization ability or pro motion
ability of the neural network.
44
 Proceedings of the International Conference on Artificial Intelligence and Smart Systems (ICAIS-2021)
IEEE Xplore Part Number: CFP21OAB-ART; ISBN: 978-1-7281-9537-7

The trained neural network system can be used to predict

the short-term t rend of clustered stocks and individual stocks.
In the figure 4, we present the GANs model for references.

Fig. 5. Data Complexity Estimation Framework

C. The Finalized Prediction Model

Fig. 4. T he GANs Model Considered
ESN has been widely used in modern nonlinear system
The ID3 algorithm is to find the most discriminative identification, time series forecasting and other fields. Its good
attributes, divide the samples into multip le subsets and form a short-term memo ry ability makes it the best choice for time
decision tree. The ult imate goal is to propose a classification series forecasting. Formula 7 defines the process.
index that can map data items in the database to a given ­° u y ½°
category. One of the categories that can general represent the Maximize G Minimize ® mro ro ¾ ,
°¯ ¦ i 1 vio xio °¿
r{1, , s}
characteristic attributes of the group as formula 5.

¦
s
1 u y
Oij 1  S ij  subject to T * r 1 ro ro
,
­ k ½
¦
2 m
 j
oo

ª º m 1 v x
° D x , x ° i 1 io io
¦
c i
1®
« k » ¾
  ¦
s
r
° «¬ D x , xr »
u y
i ¼ ° T jo r 1 ro rj
d 1, j 1, , n; j z o,
¯ ¿
¦
m
(5) v x
i 1 io ij
Then preprocess the data, define the reversal point on the uro t 0, r 1, , s,
preprocessed data, and finally extract the combination of the
technical indicators that meet the requirements [18-19]. vio t 0, i 1, , m.
(7)
1 We divide the stock market data sequence into three parts
§ m ·2
¦
in time order: training set, test set and prediction set, and take
d min ¨ ( xi,t  Tijt )2 ¸ t 1, 2,3,...P
¨ ¸ the first part of the data volume 4 t imes the second part of the
©i 1 ¹ (6) data volume. Both the training set and the test set are sets
The formula 6 defines the structure model for references. composed of the input-output sample pairs, its elements are
When extracting co mpany feature data, there are some missing sample pairs. The algorith m is essentially the gradient drop
values, so we use the method of averaging to deal with the method in optimizat ion calcu lation, which uses the error-to-
missing feature values. For examp le, the earn ings per share right and threshold first-order guide to adjust the direction of
data value of a certain co mpany in a certain quarter is missing, the next weight in order to finally achieve the minimum error.
use it in the previous the mean value of the quarter and the In order to ensure the convergence of the algorith m, the
next quarter is used as the miss ing feature value. learning rate must be less than the certain upper limit. This
Using this method can greatly reduce impact of missing determines that the convergence speed of neural network
feature values on the accuracy of the experiment. For the algorithm can not be very fast [20-22].
nonlinear problems, SVM maps the input space to the high - When approaching the minimu m value, the convergence of
dimensional feature space through nonlinear transformation, the algorith m beco mes slower and slower as the gradient
and then solves the optimal classification surface in the new change value gradually tends to zero. Based on the clustering
space. Using an appropriate kernel function in the optimal model, the ideas will be considered.
surface can achieve linear classification after certain nonlinear
transformation without increasing co mputational co mplexity. III. SIMULAT ION AND NUMERICAL A NALYSIS
In order to ensure the efficiency and adequacy of the extracted This paper uses 200 samp le data collected in 12 months to
features, the model main ly extracts features fro m that both verify the effectiveness of the combined prediction model
numerical and the textual aspects. The numerical features are based on neural network and principal co mponent analysis. In
divided into operating capability features and development the experiment, a network was constructed for the follow ing
capability features. Operat ing capability refers to the ab ility of three situations and their prediction results were co mpared.
the company to operate and manage In simple terms, it is the The figure 6 presents the result.
process by which companies use various assets to maximize
profits. Figure 5 gives the details.

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 Proceedings of the International Conference on Artificial Intelligence and Smart Systems (ICAIS-2021)
IEEE Xplore Part Number: CFP21OAB-ART; ISBN: 978-1-7281-9537-7
Fig. 6. Prediction Model Simulation Result
IV. CONCLUSION
Correlation analysis of the financial indicators and stock
price fluctuations based on artificial intelligence system. For
the optimization of the model, trying to use some different
clustering algorith ms in the co mbination with the echo state
network, integrating the results and improving the echo state
network algorith m fro m supervised to unsupervised learning is
the future research direction. This paper uses neural network
to establish a mathematical model of stock prices, and uses
this model to predict the fluctuation of stock prices. Through
comparison with actual data, it is found that the prediction
results are basically consistent with it. The experiment is
conducted compared with the latest models. In the future, we
will extend the simulation data sets to validate performance.
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