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Comparison between Forecasted Stock Prices and Original Stock Prices in the Karachi Stock Exchange

Author

Listed:
  • Khan, Dr. Muhammad Irfan
  • Syed, Muhammad Salman

Abstract

Stock price forecasting is certainly a significant aspect to an investor which enables him to invest or to retain its equity. The aim of study is to determine the efficiency of two different security companies i.e. FDM and Magnus and compare its forecast with the original market prices. By applying the paired sample t – test and correlation analysis we found that there is a significant difference observed in the forecasted prices of both the companies but on the other hand, we found a significant correlation between the forecasted prices by the two companies which lead to the conclusion that these two firms can better forecast the increase or decrease in the market prices but as far as the accuracy is concerned, paired sample t –test showed that the firms have shown lacking while predicting the accurate prices

Suggested Citation

  • Khan, Dr. Muhammad Irfan & Syed, Muhammad Salman, 2015. "Comparison between Forecasted Stock Prices and Original Stock Prices in the Karachi Stock Exchange," MPRA Paper 72647, University Library of Munich, Germany, revised Jul 2015.
    • Handle: RePEc:pra:mprapa:72647
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    References listed on IDEAS

    as
    1. Geert Bekaert & Robert J. Hodrick & Xiaoyan Zhang, 2009. "International Stock Return Comovements," Journal of Finance, American Finance Association, vol. 64(6), pages 2591-2626, December.
    2. Robert Battalio & Andrew Ellul & Robert Jennings, 2007. "Reputation Effects in Trading on the New York Stock Exchange," Journal of Finance, American Finance Association, vol. 62(3), pages 1243-1271, June.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Forecasting; Risk Analysis; Stock Prices; Correlation; Paired Sample t-test;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation

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