Forecasting is a decision-making tool used by many businesses to help in budgeting, planning, and estimating future growth. In the simplest terms, forecasting is the attempt to predict future outcomes based on available data, critical analysis of the past events and management insight. There are two forecast types: judgment-based (e.g. “gut feel”) and quantitative (e.g. statistics). The most trustworthy forecasts combine both methods to support their strengths and mitigate their weaknesses.
Stock analysts use various forecasting methods to determine how a stock's price will shift in the future. They might look at revenue and compare it to economic indicators. Changes in financial or statistical data are observed to determine crossed relationships between multiple variables. When variables are unknown, as in the case of our client who is working with cryptocurrencies, LSTM models -combined with traditional statistics- can be used to obtain accurate results.