Can LSTM Networks Beat the Market? A Deep Learning Approach to S&P 500 Prediction
Can LSTM Networks Beat the Market? A Deep Learning Approach to S&P 500 Prediction
Dec 30, 2024
python data-science machine-learning lstm finance forecasting tensorflow keras pandas

A comparative study of neural network models (LSTM, CNN-LSTM) for S&P 500 index prediction. The analysis evaluates multiple architectures against baseline strategies like buy-and-hold and naive forecasting, finding that while specialized models like LSTM with Batch Normalization and Regularization improve technical error metrics (MSE, MAE). However, when tested with a simulated trading, beating market returns remains a significant challenge requiring further architectural and strategy refinement.