Topology of products similarity network for market forecasting

Jingfang Fan*, Keren Cohen, Louis M. Shekhtman, Sibo Liu, Jun Meng, Yoram Louzoun*, Shlomo Havlin*

*Corresponding author for this work

Research output: Contribution to journalJournal articlepeer-review

5 Citations (Scopus)


The detection and prediction of risk in financial markets is one of the main challenges of economic forecasting, and draws much attention from the scientific community. An even more challenging task is the prediction of the future relative gain of companies. We here develop a novel combination of product text analysis, network theory and topological based machine learning to study the future performance of companies in financial markets. Our network links are based on the similarity of firms’ products and constructed using the Securities Exchange Commission (SEC) filings of US listed firms. We find that several topological features of this network can serve as good precursors of risks or future gain of companies. We then apply machine learning to network attributes vectors for each node to predict successful and failing firms. The resulting accuracies are much better than current state of the art techniques. The framework presented here not only facilitates the prediction of financial markets but also provides insight and demonstrates the power of combining network theory and topology based machine learning.
Original languageEnglish
Article number69
JournalApplied Network Science
Publication statusPublished - 28 Aug 2019

User-Defined Keywords

  • Topology
  • Network
  • Economic
  • Machine learning


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