A Novel Hybrid GCN-LSTM Algorithm for Energy Stock Price Prediction: Leveraging Temporal Dynamics and Inter-Stock Relationships

Energy stock price prediction is a pivotal challenge in financial forecasting, characterized by high volatility and complexity influenced by geopolitical factors, regulatory shifts, and sector-specific issues. Traditional methods often struggle to account for the intricate dependencies and temporal patterns present in energy stock data. To address these limitations, this study introduces a hybrid model that integrates a Graph Convolutional Network (GCN) with an attention-enhanced Long Short-Term Memory (LSTM) architecture. By employing a graph structure derived from Dynamic Time Warping (DTW), the GCN captures inter-stock relationships, while the attention mechanism within the LSTM component refines the modelling of temporal dynamics, allowing the model to focus on the most relevant historical information. Experimental evaluations across multiple energy stocks show that this combined LSTMGC model significantly outperforms conventional approaches- including Linear Regression, GRU, MLP, and standalone LSTMs- when assessed using Mean Squared Error (MSE) and R-squared (R2) metrics. By jointly leveraging spatial and temporal dependencies, as well as the selective attention mechanism, the proposed framework enhances predictive accuracy and reliability, offering valuable insights for investors and policymakers navigating the evolving energy market.