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Establishing a Multiple-Criteria Decision-Making Model for Stock Investment Decisions Using Data Mining Techniques

Author

Listed:
  • Kuo-Chih Cheng

    (Department of Accounting, National Changhua University of Education, Changhua 500, Taiwan)

  • Mu-Jung Huang

    (Department of Accounting, National Changhua University of Education, Changhua 500, Taiwan)

  • Cheng-Kai Fu

    (Department of Accounting, National Changhua University of Education, Changhua 500, Taiwan)

  • Kuo-Hua Wang

    (Department of Finance, National Changhua University of Education, Changhua 500, Taiwan)

  • Huo-Ming Wang

    (Department of Finance, National Changhua University of Education, Changhua 500, Taiwan)

  • Lan-Hui Lin

    (Department of Accounting, National Changhua University of Education, Changhua 500, Taiwan)

Abstract

This study attempts to integrate the decision tree algorithm with the Apriori algorithm to explore the relationship among financial ratio, corporate governance, and stock returns to establish a stock investment decision model. The sports and leisure related industries are employed as the research target. The data are collected and processed for generating decision tree and association rules. Based on the analysis outcome, an investment decision model is constructed for investors expecting to decrease their investment risks and further increase their profits. This stock investment decision model is one type of multiple-criteria decision-making model. This study makes three critical contributions to investors. (1) It proposes a systematical model of exploring related data through the decision tree algorithm and the Apriori algorithm to reveal the implicit investment knowledge. (2) An effective investment decision model is established and expected to provide a reference basis during stock-picking decisions. (3) The investment decision model is enhanced with implicit rules found among variables using association rules.

Suggested Citation

  • Kuo-Chih Cheng & Mu-Jung Huang & Cheng-Kai Fu & Kuo-Hua Wang & Huo-Ming Wang & Lan-Hui Lin, 2021. "Establishing a Multiple-Criteria Decision-Making Model for Stock Investment Decisions Using Data Mining Techniques," Sustainability, MDPI, vol. 13(6), pages 1-14, March.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:6:p:3100-:d:515382
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    References listed on IDEAS

    as
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