What is the response variable for the Group Stock Price Project? I understand we have to predict if the stock goes up or down the next day. Does that mean we test if Next day Open Price is > Current day
Answers and follow-up questions Answer or follow-up question 1
The response variable is whether or not stock will go up the next day. Traders buy stocks once the market opens and sell at the end of the
trading day. They do not like to be exposed to the market after trading hours. Therefore:
response= ifelse(closing_price_tomorrow/open_price_tomorrow >= 1.1, 1, 0)
In words: if tomorrow's closing price is 10% higher than tomorrow's open price it's a 1, otherwise a 0.
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