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Source: Journal Citation ReportsTM from ClarivateTM 2022

Entrepreneurship and Sustainability Issues Open access
Journal Impact FactorTM (2022) 1.7
Journal Citation IndicatorTM (2022) 0.42
Received: 2022-06-11  |  Accepted: 2022-09-03  |  Published: 2022-09-30

Title

Profitability of current investments in stock indexes


Abstract

Investing in stock indexes has become an integral part of financial portfolios. Fearing the loss of savings value, households move their financial reserves into stocks, bonds and stock indexes; the latest concerns the subject of this article. The article focuses on determining the best method of forecasting the prices of stock indexes, S&P 500 and NASDAQ Composite, comparing the Simple moving average (SMA) technique with the Autoregressive integrated moving average (ARIMA) model based on free software RStudio. We formulated two plausible hypotheses: Which of these two methods - SMA or ARIMA - is more accurate for predicting the prices of selected stock indexes in the last thirty years? How will the price of the selected stock indexes develop according to the better of the suggested method through 2022? The ARIMA model indicated better results, proving great ability to forecast both indexes through 2022. The method determined the NASDAQ Composite stock index value to be 16,115.75 USD per stock through 31.12.2022, whereas S&P 500 index saw the value of 5,025.86 USD per stock through the same date. The follow-up research should deal with forecasting different stock indexes and comparing other conventional techniques for predicting time series. The subsequent study may also compare methods’ forecasting accuracy between stock indexes and independent companies, whose stock volatility could favour different forecasting approaches.


Keywords

forecasting, ARIMA model, moving averages, stock indexes, return on investments


JEL classifications

G22 , G11 , G17


URI

http://jssidoi.org/jesi/article/1004


DOI


Pages

420-434


Funding


This is an open access issue and all published articles are licensed under a
Creative Commons Attribution 4.0 International License

Authors

Kučera, Jiří
Institute of Technology and Business in České Budějovice, České Budějovice, Czech Republic https://www.vstecb.cz
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Kalinová, Eva
Institute of Technology and Business in České Budějovice, České Budějovice, Czech Republic https://www.vstecb.cz
Articles by this author in: CrossRef |  Google Scholar

Divoká, Lenka
University of Žilina, Žilina, Slovakia https://www.uniza.sk
Articles by this author in: CrossRef |  Google Scholar

Journal title

Entrepreneurship and Sustainability Issues

Volume

10


Number

1


Issue date

September 2022


Issue DOI


ISSN

ISSN 2345-0282 (online)


Publisher

VšĮ Entrepreneurship and Sustainability Center, Vilnius, Lithuania

Cited

Google Scholar

Article views & downloads

HTML views: 1184  |  PDF downloads: 531

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