Sparrow Search Algorithm-Optimized Long Short-Term Memory Model for Stock Trend Prediction

The long short-term memory (LSTM) network is especially suitable for dealing with time series-related problems, which has led to a wide range of applications in analyzing stock market quotations and predicting future price trends. However, the selection of hyperparameters in LSTM networks was often based on subjective experience and existing research. The inability to determine the optimal values of the parameters results in a reduced generalization capability of the model. Therefore, we proposed a sparrow search algorithm-optimized LSTM (SSA-LSTM) model for stock trend prediction. The SSA was used to find the optimal hyperparameters of the LSTM model to adapt the features of the data to the structure of the model, so as to construct a highly accurate stock trend prediction model. With the Shanghai Composite Index stock data in the last decade, the mean absolute percentage error, root mean square error, mean absolute error, and coefficient of determination between stock prices predicted by the SSA-LSTM method and actual prices are 0.0093, 41.9505, 30.5300, and 0.9754. The result indicates that the proposed model possesses higher forecasting precision than other traditional stock forecasting methods and enhances the interpretability of the network model structure and parameters.