The Simple Moving Average forecasted value of IBEX 35 Index on the next trading day is expected to be 13,323 with a mean absolute deviation of 104.94 and the sum of the absolute errors of 6,296. Investors can use prediction functions to forecast IBEX 35's index prices and determine the direction of IBEX 35 Index's future trends based on various well-known forecasting models. However, exclusively looking at the historical price movement is usually misleading.
A two period moving average forecast for IBEX 35 is based on an daily price series in which the stock price on a given day is replaced by the mean of that price and the preceding price. This model is best suited to price patterns experiencing average volatility.
IBEX 35 Simple Moving Average Price Forecast For the 26th of March
Given 90 days horizon, the Simple Moving Average forecasted value of IBEX 35 Index on the next trading day is expected to be 13,323 with a mean absolute deviation of 104.94, mean absolute percentage error of 18,321, and the sum of the absolute errors of 6,296.
Please note that although there have been many attempts to predict IBEX Index prices using its time series forecasting, we generally do not recommend using it to place bets in the real market. The most commonly used models for forecasting predictions are the autoregressive models, which specify that IBEX 35's next future price depends linearly on its previous prices and some stochastic term (i.e., imperfectly predictable multiplier).
IBEX 35 Index Forecast Pattern
IBEX 35 Forecasted Value
In the context of forecasting IBEX 35's Index value on the next trading day, we examine the predictive performance of the model to find good statistically significant boundaries of downside and upside scenarios. IBEX 35's downside and upside margins for the forecasting period are 13,322 and 13,324, respectively. We have considered IBEX 35's daily market price to evaluate the above model's predictive performance. Remember, however, there is no scientific proof or empirical evidence that traditional linear or nonlinear forecasting models outperform artificial intelligence and frequency domain models to provide accurate forecasts consistently.
The below table displays some essential indicators generated by the model showing the Simple Moving Average forecasting method's relative quality and the estimations of the prediction error of IBEX 35 index data series using in forecasting. Note that when a statistical model is used to represent IBEX 35 index, the representation will rarely be exact; so some information will be lost using the model to explain the process. AIC estimates the relative amount of information lost by a given model: the less information a model loses, the higher its quality.
AIC
Akaike Information Criteria
126.0884
Bias
Arithmetic mean of the errors
-44.7058
MAD
Mean absolute deviation
104.9408
MAPE
Mean absolute percentage error
0.0083
SAE
Sum of the absolute errors
6296.45
The simple moving average model is conceptually a linear regression of the current value of IBEX 35 Index price series against current and previous (unobserved) value of IBEX 35. In time series analysis, the simple moving-average model is a very common approach for modeling univariate price series models including forecasting prices into the future
Predictive Modules for IBEX 35
There are currently many different techniques concerning forecasting the market as a whole, as well as predicting future values of individual securities such as IBEX 35 Index. Regardless of method or technology, however, to accurately forecast the index market is more a matter of luck rather than a particular technique. Nevertheless, trying to predict the index market accurately is still an essential part of the overall investment decision process. Using different forecasting techniques and comparing the results might improve your chances of accuracy even though unexpected events may often change the market sentiment and impact your forecasting results.
Other Forecasting Options for IBEX 35
For every potential investor in IBEX, whether a beginner or expert, IBEX 35's price movement is the inherent factor that sparks whether it is viable to invest in it or hold it better. IBEX Index price charts are filled with many 'noises.' These noises can hugely alter the decision one can make regarding investing in IBEX. Basic forecasting techniques help filter out the noise by identifying IBEX 35's price trends.
One of the popular trading techniques among algorithmic traders is to use market-neutral strategies where every trade hedges away some risk. Because there are two separate transactions required, even if one position performs unexpectedly, the other equity can make up some of the losses. Below are some of the equities that can be combined with IBEX 35 index to make a market-neutral strategy. Peer analysis of IBEX 35 could also be used in its relative valuation, which is a method of valuing IBEX 35 by comparing valuation metrics with similar companies.
The index market is financially volatile. Despite the volatility, there exist limitless possibilities of gaining profits and building passive income portfolios. With the complexity of IBEX 35's price movements, a comprehensive understanding of forecasting methods that an investor can rely on to make the right move is invaluable. These methods predict trends that assist an investor in predicting the movement of IBEX 35's current price.
Market strength indicators help investors to evaluate how IBEX 35 index reacts to ongoing and evolving market conditions. The investors can use it to make informed decisions about market timing, and determine when trading IBEX 35 shares will generate the highest return on investment. By undertsting and applying IBEX 35 index market strength indicators, traders can identify IBEX 35 Index entry and exit signals to maximize returns.
The analysis of IBEX 35's basic risk indicators is one of the essential steps in accurately forecasting its future price. The process involves identifying the amount of risk involved in IBEX 35's investment and either accepting that risk or mitigating it. Along with some essential techniques for forecasting ibex index prices, we also provide a set of basic risk indicators that can assist in the individual investment decision or help in hedging the risk of your existing portfolios.
Please note, the risk measures we provide can be used independently or collectively to perform a risk assessment. When comparing two potential investments, we recommend comparing similar equities with homogenous growth potential and valuation from related markets to determine which investment holds the most risk.
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Analyzing currently trending equities could be an opportunity to develop a better portfolio based on different market momentums that they can trigger. Utilizing the top trending stocks is also useful when creating a market-neutral strategy or pair trading technique involving a short or a long position in a currently trending equity.