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Share Price Prediction and Analysis - Essay Example
Author : pgulgowski
Finance & Accounting
Pages 6 (1506 words)
Share Price Prediction and Analysis Institution Date Introduction Share valuation is the process of calculated the actual value of a given company through the use of its shares. Share valuation helps investors understand not only the performance of a given organization but also make appropriate decisions in as far as investment is concerned (Chen, et al., 2003)…
The following is a critical review of such literature. In addition, the discussion applies a synthesis of two approaches/models identified to predict the share prices for Tesco Plc from the publications of the firm’s financial statements for 2008 and 2009. Lastly, this discussion attempts to test the approach by comparing these two sets of predictions with actual share prices. A concluding remark, which comments on the results, winds up the paper. Approaches/Models for Predicting Share Prices In short-term or medium-term, different models or approaches are used in predicting the future prices of shares of various companies. Share prices of companies may take different forms such as linear, horizontal, cyclic, or seasonal as influenced by prevailing market and environmental factors (Hassan, et al., 2007). Due to lack of prediction methods that provide least prediction error, investors tend to apply numerous methods thereby comparing their results in a bid to finding the best model or approach to use (Chen, et al., 2003). ...