In theory, we can apply regression techniques in predicting prices of a particular stock. However, it's difficult to ensure the stock we pick is suitable enough for learning purposes—its price should follow some learnable patterns and it hasn't been affected by unprecedented instances or irregular events. Hence, we'll herein be focusing on one of the most popular stock indexes to better illustrate and generalize our price regression approach.
Let's first cover what an index is. A stock index is a statistical measure of the value of a portion of the overall stock market. An index includes several stocks that are diverse enough to represent a section of the whole market. And the price of an index is typically computed as the weighted average of the prices of selected stocks.
The Dow Jones Industrial Average (DJIA) is one of the...
