Build a Model to Predict Stock Prices using ChatGPT

Introduction

In the current environment, using ChatGPT for data science initiatives offers unmatched benefits. ChatGPT makes project integration easier with its versatility across domains, including language creation, regression, and classification, and its support for pre-trained models and libraries. This article explores on building a model to predict stock prices using ChatGPT. We will look into each step of how ChatGPT can assist in various stages of this data science project, from data loading to model evaluation.

Steps to Build Data Science Project using ChatGPT

Although ChatGPT cannot create a data science project on its own, it can be an effective conversational facilitator along the process. The typical processes in developing a data science project are broken down here, along with how ChatGPT can help:

1. Problem Definition: Define the problem you want to solve with your data science project. Be specific about your project and what you want to implement or analyze.
2. Data Collection: Gather relevant data from various sources, such as databases or datasets available online.
3. Data Preprocessing and Exploration: Clean and preprocess the collected data to handle missing values, outliers, and inconsistencies. Explore the data using descriptive statistics, visualizations, and other techniques to gain insights into its characteristics and relationships.
4. Data Visualization: Visualize the dataset using various plots and charts to gain insights into the data distribution, trends, and patterns.
5. Feature Engineering: Create or derive new features from the existing dataset to improve model performance. Handle categorical variables through encoding techniques if necessary.
6. Model Development: Choose how ChatGPT will be used in your data science project. It can be used, for instance, to create text, summarize, classify, or analyze data.
7. Model Evaluation: Assess the trained models according to the kind of problem (classification, regression, etc.) using relevant evaluation metrics like accuracy, precision, recall, and F1-score.

How to Build a Model to Predict Stock Prices using ChatGPT

In this section, we will look at a basic example of building a data science project on building a model to predict stock prices using ChatGPT. We will follow all the steps mentioned above.

Problem Statement

Develop a machine learning model to predict future stock prices based on historical data, using moving averages as features. Evaluate the model’s accuracy using Mean Squared Error and visualize predicted vs. actual prices.

Data Collection

Prompt

Load the dataset and necessary libraries to predict future stock prices based on historical data. Also Define the ticker symbol, and the start and end dates for fetching historical stock price data

Code generated by ChatGPT

import yfinance as yf
import pandas as pd
import numpy as np
import matplotlib.pyplot as plt
import seaborn as sns
from sklearn.model_selection import train_test_split, GridSearchCV
from sklearn.linear_model import LinearRegression
from sklearn.metrics import mean_squared_error, mean_absolute_error, r2_score

ticker_symbol="AAPL"
start_date="2021-01-01"
end_date="2022-01-01"
stock_data = yf.download(ticker_symbol, start=start_date, end=end_date)
stock_data

Output

Data Preprocessing and Exploration

Prompt

Now check for missing values and explore the structure of the fetched stock price dataset. Summarize any findings regarding missing data and provide insights into the dataset’s characteristics and structure.

Code Generated by ChatGPT

missing_values = stock_data.isnull().sum()
print("Missing Values:\n", missing_values)

Output

Data Visualization

Prompt

Now visualize historical stock price data to identify trends and patterns. Create a plot showcasing the closing price of the stock over time, allowing for insights into its historical performance.

Code Generated by ChatGPT

print("Dataset Information:\n", stock_data.info())

Output

Now Visualize the historical stock price data.

plt.figure(figsize=(10, 6))
plt.plot(stock_data['Close'], color="blue")
plt.title(f"{ticker_symbol} Stock Price (Jan 2021 - Jan 2022)")
plt.xlabel("Date")
plt.ylabel("Close Price")
plt.grid(True)
plt.show()

Output

Feature Engineering

Prompt

Next step is to generate moving averages (MA) of the closing price, such as MA_50 and MA_200, to serve as features for the predictive model. Address missing values arising from the rolling window calculations to ensure the integrity of the dataset.

Code Generated by ChatGPT

stock_data['MA_50'] = stock_data['Close'].rolling(window=50).mean()
stock_data['MA_200'] = stock_data['Close'].rolling(window=200).mean()
print(stock_data['MA_50'])
print(stock_data['MA_200'])

Output

Remove rows with missing values due to rolling window calculations.

stock_data.dropna(inplace=True)

Define features (moving averages) and target (close price).

X = stock_data[['MA_50', 'MA_200']]
y = stock_data['Close']
print(X.head())
print(y.head())

Output

Split the data into training and testing sets.

X_train, X_test, y_train, y_test = train_test_split(X, y, test_size=0.2, random_state=42)
print(X_train.head())
print(X_test.head())
print(y_train.head())
print(y_test.head())

Output

Model Development

Prompt

Optimize the linear regression model through hyperparameter tuning using GridSearchCV. Initialize and train the linear regression model with the optimal parameters identified from the hyperparameter tuning process.

parameters = {'fit_intercept': [True, False]}
regressor = LinearRegression()
grid_search = GridSearchCV(regressor, parameters)
grid_search.fit(X_train, y_train)
best_params = grid_search.best_params_
print("Best Parameters:", best_params)

Output

Initialize and train the linear regression model with best parameters.

model = LinearRegression(**best_params)
model.fit(X_train, y_train)

Output

Model Evaluation

Prompt

Utilize the trained model to make predictions on the test data. Calculate evaluation metrics including Mean Squared Error (MSE), Mean Absolute Error (MAE), Root Mean Squared Error (RMSE), and R-squared (R^2) score to assess model performance. Visualize the predicted versus actual close prices to further evaluate the model’s effectiveness.

Code Generated by ChatGPT

predictions = model.predict(X_test)

# Calculate evaluation metrics
mse = mean_squared_error(y_test, predictions)
mae = mean_absolute_error(y_test, predictions)
rmse = np.sqrt(mse)
r2 = r2_score(y_test, predictions)

print("Mean Squared Error:", mse)
print("Mean Absolute Error:", mae)
print("Root Mean Squared Error:", rmse)
print("R^2 Score:", r2)

Output

Visualize the predicted vs. actual close prices.

plt.scatter(y_test, predictions, color="blue")
plt.title("Actual vs. Predicted Close Prices")
plt.xlabel("Actual Close Price")
plt.ylabel("Predicted Close Price")
plt.grid(True)
plt.show()

Output

Conclusion

This article explores ChatGPT’s advantages for data science projects, emphasizing both its adaptability and effectiveness. It draws attention to its function in problem formulation, model assessment, and communication. The ability of ChatGPT to comprehend natural language has been applied to data gathering, preprocessing, and exploration; this has been helpful in building a model to predict stock prices. It has also been applied to assess performance, optimize models, and obtain insightful knowledge, underscoring its potential to completely transform the way projects are carried out.