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Record W4404879405 · doi:10.30574/ijsra.2024.13.2.2273

Forecasting currency exchange rates using EMD-ARIMA Model

2024· article· en· W4404879405 on OpenAlexaboutno aff
Dennis Cheruiyot Kiplangat

Bibliographic record

VenueInternational Journal of Science and Research Archive · 2024
Typearticle
Languageen
FieldDecision Sciences
TopicForecasting Techniques and Applications
Canadian institutionsnot available
Fundersnot available
KeywordsAutoregressive integrated moving averageCurrencyEconometricsExchange rateEconomicsStatisticsMathematicsTime seriesMonetary economics

Abstract

fetched live from OpenAlex

In today’s global economy, accuracy in forecasting currency exchange rates is of much importance to any future investment. Currency exchange rates portray non-linear and non-stationary characteristics hence to address these characteristics; this paper proposes a hybrid forecasting model using the Empirical Mode Decomposition (EMD) technique, and the ARIMA model. EMD is used to decompose the raw currency exchange rate data into several intrinsic mode functions and one residual. The process of extracting the IMFs from the data is called the sifting process. EMD was used to detect the moving trend of currency exchange rate data and improve the forecasting success of the ARIMA model. The data were obtained from the Central Bank of Kenya website between the periods January 2005 to May 2017. The best ARIMA model fitted to the raw data before decomposition based on information criterion statistics was found to be ARIMA (1,0,3) for the KShs/AE. Dirham, ARIMA (1,0,1) for KShs/Australian dollar and ARIMA (1,0,3) for KShs/Canadian dollar currency exchange rates. After forecasting, we then compared the forecasted values with the actual data to check the suitability of the ARIMA model. Further, EMD was applied to the exchange rate data and then fitted an ARIMA model to the IMFs. The best model was found to be ARIMA (1,0,1) for the KShs/AE. Dirham, ARIMA (0,0,1) for KShs/Australian dollar and ARIMA (1,0,1) for KShs/Canadian dollar currency exchange rates. The appropriateness of these models was tested using the Ljung-Box test. The forecasting performance of each model was evaluated using the RMSE.

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How this classification was reachedexpand

Full frame distilled prediction

Teacher imitation

Not calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.

metaresearch head score (Codex)0.013
metaresearch head score (Gemma)0.005
Version: codex-gemma-dda1882f352aValidation status: machine_predicted_unvalidated
Candidate categoriesScholarly communication
Consensus categoriesnone
DomainCandidate signal: none · Consensus signal: none
Study designCandidate signal: Other design · Consensus signal: none
GenreCandidate signal: Empirical · Consensus signal: Empirical
Teacher disagreement score0.777
Threshold uncertainty score1.000

Codex and Gemma teacher scores by category

CategoryCodexGemma
Metaresearch0.0130.005
Meta-epidemiology (narrow)0.0000.000
Meta-epidemiology (broad)0.0000.000
Bibliometrics0.0020.001
Science and technology studies0.0000.001
Scholarly communication0.0010.001
Open science0.0020.001
Research integrity0.0000.000
Insufficient payload (model declined to judge)0.0000.000

Machine scores (provisional)

The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.

Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.

Opus teacher head0.513
GPT teacher head0.570
Teacher spread0.057 · how far apart the two teachers sit on this one work
Validation statusscore_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from it

Classification

machine, unvalidated

Machine predicted; a candidate call from one teacher head, not a consensus.

Study designOther design
Domainnot available
GenreEmpirical

How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".

Quick stats

Citations0
Published2024
Admission routes1
Has abstractyes

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