Data processing: financial – business practice – management – or co – Automated electrical financial or business practice or... – Finance
Reexamination Certificate
1998-09-14
2003-03-11
Hafiz, Tariq R. (Department: 3623)
Data processing: financial, business practice, management, or co
Automated electrical financial or business practice or...
Finance
C705S03600T, C705S037000, C705S001100, C705S500000
Reexamination Certificate
active
06532449
ABSTRACT:
BACKGROUND OF INVENTION
The present invention relates to a method for determining a future value of a numerical time series and, in particular, to a method for predicting a future value or direction of a numerical time series based on a non-numerical time series.
Prior art methods exist for predicting a future value or direction of a numerical time series. Generally, these prior art methods apply statistical analysis techniques to the numerical time series data as a basis for predicting future occurrences in the numerical time series. An application of these prior art methods can be found in financial trading systems. Typically, financial trading systems use indicators and predictors for determining a future value or direction of a financial time series, such as the price of a commodity or a market index, and whether the market for the instrument underlying the financial time series should be entered or exited.
An indicator can be a financial time series, for example the historical daily closing prices of the Nasdaq composite, or functions, such as fast stochastic or moving averages that generate a numerical time series. A predictor is a statistical technique, for example simplex prediction, simplex difference prediction, polynomial prediction and fractional prediction, that when applied to a financial time series predict, with a given probability, a future value or direction of the financial time series. Based on a selection of indicators and predictors, the trading system predicts a future value or direction of the financial time series and whether a trade should be made.
Predictive systems are also used to analyze numerical time series to predict a future value or direction in a variety of other contexts as well, such as to project sales, perform climate forecasts (e.g. El Niño) and risk analysis.
Although prior art techniques for predicting a future value or direction of a numerical time series work for their intended purpose, the accuracy of the predictions made using such techniques is necessarily limited to information embedded within the numerical time series and the effectiveness of the statistical techniques used in mining such information. Accordingly, it is desirable to provide a more accurate method of predicting the future value or direction of a numerical time series.
SUMMARY OF THE INVENTION
The present invention is directed to a method for using a non-numerical time series to predict a future value or direction of a numerical time series. In accordance with methods of the present invention, a future value or direction of a first numerical time series is predicted by performing the steps of forming a non-numerical time series; optimizing the non-numerical time series; converting at least a portion of the optimized non-numerical time series into a second numerical time series; and using the second numerical time series to predict the future value of the first numerical time series.
The methods of the present invention are adaptable to predict the future value or direction of a broad range of numerical time series. For example, in one application of the present invention, a text-based time series, such as a series of newspaper articles, is used to predict a future value or direction of a financial time series thereby increasing the profitability of trading the financial instrument underlying the financial time series. Similarly, the methods of the present invention may applied in a variety of contexts including, but not limited to, predicting future sales trends, political trends and reactions and media responses.
Accordingly, it is an object of the present invention to provide a more accurate method for predicting the future value or direction of a numerical or non-numerical time series.
Another object of the present invention is to use a non-numerical time series to predict the future value or direction of a numerical time series or another non-numerical time series.
It is yet another object of the present invention to use a numerical time series to predict the future value of non-numerical time series.
Still other objects and advantages of the invention will in part be obvious and will in part be apparent from the specification.
The invention accordingly comprises the several steps and the relation of one or more of such steps with respect to each of the others thereof, which will be exemplified in the method hereinafter disclosed, and the scope of the invention will be indicated in the claims.
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Goertzel Ben
Pazer Lisa
Hafiz Tariq R.
Levi Joseph E.
Robinson-Boyce Akiba
Zimmerman & Levi LLP
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