Stock Investment Selection Management Based on Bayesian Method

Abstract

This paper aims to provide a stock selection management method based on bayesian in order to improve the investment management for investors. Firstly, the financial indicators of Shanghai A-shares were extracted, and those that had a significant impact on the stock increase were selected as the characteristic information of the stock by bayesian model average method. Secondly, the stock was classified into high yield stocks and other stocks by the stock characteristic information using naive Bayesian classification method. Finally, compare the increase of classified high yield stocks with the counterpart of benchmark. The results show that the classified high-yield stock by naive bayesian classification rose higher, indicates that the method provides the investors opportunity for higher returns on the stock investment, which is a meaningful method to improve their investment management. Keywords— Stock Investment Selection Management, Bayesian Model Average Method, Bayesian Naive Classification