Selection of Technical Indicators for Stock Market Prediction: Correlation Based Approach

This article examines the importance of feature selection in analyzing the stock market using technical indicators. With the large volume of data available, identifying relevant and informative features is essential for effective analysis and prediction. In this study, an approach based on correlation coefficients is proposed to address this challenge. This method uses correlation coefficients to measure the strength relationship between various technical indicators and stock price movements. By calculating the correlation coefficient for each pair of indices, statistically significant relationships can be identified. Real stock market data is used to evaluate the effectiveness of the strategy. The results shows that the successful identification of a subset of relevant and informative features contributes significantly to the prediction of stock price movements.