Methodology

How Stock View actually works.

Classical quantitative techniques, applied transparently to US equity data. We don't sell secret sauce because there isn't one — what we sell is honest execution of well‑understood methods, walk‑forward validated, with real accuracy numbers visible to every user.

Most stock‑prediction apps treat their algorithms as a mystery. We do the opposite. The methods below are well‑published in quantitative finance — k‑nearest‑neighbors on time series, HAR‑style volatility models, cross‑sectional ranking on standard factors. Our differentiation isn't a hidden trick; it's that we measure how well these methods actually work, publish that number, and refuse to overclaim. If a panel doesn't show real edge over a naive baseline, the app says so.

Rewind pattern analog

k‑nearest‑neighbors on z‑normalized return windows

For a chosen forecast horizon H (5, 10, or 22 trading days), the lookback window length is set to L = max(20, 4H). The last L daily log‑returns are z‑normalized (centered and divided by their own standard deviation) so two windows are compared on shape, not absolute magnitude. The same z‑normalization is applied to every historical window in the past five years for that stock; Euclidean distance between the current window and each historical window gives the similarity. The k closest historical windows are the "analogs."

For each analog, we record what actually happened to that stock over the H trading days that followed the analog window. The collection of those forward returns is the output — a small empirical distribution, summarized by its mean, its 25–75% interquartile range, the proportion that finished positive ("up‑rate"), and a histogram. A kernel similarity score exp(−d² / 2σ²) with σ set to the median candidate distance gives each analog a comparable "closeness" weight.

What you see

A distribution of forward outcomes from the closest historical analogs, plus the stock's overall base rate for comparison. The honest read is the spread (25–75% range), not the mean.

How we validate

Walk‑forward rank‑IC across 200+ US large‑caps and three horizons. The raw‑path variant beat a snapshot‑based alternative at every horizon — that's why it's what ships.

What this doesn't claim. Single‑stock direction has no reliable edge over the base rate at the horizons we forecast. Rewind is presented as historical context — "here is what happened the last k times this stock looked similar" — not as a prediction. The mean of the distribution is not a forecast; the spread is the honest content.

Volatility regime forecast

HAR‑style features + walk‑forward logistic regression

This is the most trustworthy of the three. We compute realized volatility over rolling windows at three frequencies — daily, weekly (5‑day average), and monthly (22‑day average) — the classical HAR ("Heterogeneous Autoregressive") feature set introduced by Corsi (2009). These features feed a logistic regression that outputs the probability that realized volatility over the next H trading days will be high (above this stock's trailing median) versus calm.

Training is strictly walk‑forward: at every test point the model uses only data available up to that point, never the future. We re‑train on an expanding window and evaluate on the next out‑of‑sample period. The accuracy you see in the app is what the model actually achieved on data it never saw during training — not in‑sample fit.

What you see

A probability of high vs calm volatility, the model's real out‑of‑sample accuracy, an AUC score (0.5 = no skill, 1.0 = perfect), and the two naive baselines it must beat for a "real edge" verdict.

How we validate

Beats two baselines: Persistence ("today's regime continues") and Always‑calm ("guess the more common regime"). If we don't beat both, the verdict is not green. AUC is reported alongside accuracy because accuracy alone can mislead on imbalanced regimes.

What this doesn't claim. A high‑volatility forecast does not say "the price will fall" — volatility is direction‑neutral; markets can move sharply up or sharply down. Use this as a risk read for position sizing and option pricing intuition, not a directional call.

Relative ranking

Cross‑sectional percentile on five technical factors

For every stock in your loaded universe we compute five standard factors, then rank each stock cross‑sectionally as a percentile. The factors: price momentum (12‑month minus 1‑month return), trend (price vs trailing moving averages), low‑volatility (inverse realized vol), RSI‑14, and 52‑week‑high proximity. The output is a position on a 0–100 scale per factor, not a single composite score.

The factors themselves are textbook technical indicators with decades of published literature; we make no claim that any one of them, in isolation, predicts returns reliably for an individual stock. What ranking provides is context: where does this stock sit versus its peers right now, and how does that position compare to its own history?

What you see

Five percentile dots showing where the stock sits on each factor versus the loaded universe. Clickable leaderboards expose the top and bottom names on each factor.

How we validate

Percentile ranks are by construction — they reflect the universe you load. We don't backtest these as standalone trading signals (and you shouldn't either). Ranking is best read as descriptive context for the other panels.

What this doesn't claim. Being top‑decile on momentum or RSI is not a buy signal. Single‑factor leaderboards are useful for understanding the cross‑section of your universe today — not for stock selection in isolation. Load enough names (at least 50–100) for the percentiles to be meaningful.

What Stock View deliberately does not do

A short, honest list — because what an analytics tool omits is as important as what it includes.

  • No buy/sell recommendations. Every output is presented as historical context, probability, or relative ranking — never as "buy this" or "sell this."
  • No "AI prediction" claims. We use logistic regression and nearest‑neighbor matching — both classical, both interpretable. We don't market a black box.
  • No brokerage connection. Stock View never connects to a brokerage account, never places orders, never holds funds. It is read‑only.
  • No portfolio upload required. The app doesn't ingest your holdings; nothing leaves your device beyond the public market‑data lookups it makes.
  • No in‑sample accuracy claims. Every accuracy figure is out‑of‑sample, walk‑forward measured. In‑sample fit is meaningless and we don't show it.
  • No promises about returns. Past performance does not guarantee future results. We say this because it's true, not because regulators make us.

Academic basis & further reading

The methods we use are well‑documented in the quantitative finance literature. A few starting points if you'd like to read more:

  1. Corsi, F. (2009). "A Simple Approximate Long‑Memory Model of Realized Volatility." Journal of Financial Econometrics, 7(2), 174–196. — The HAR volatility model used in our regime forecast.
  2. Lo, A. W., Mamaysky, H., & Wang, J. (2000). "Foundations of Technical Analysis." Journal of Finance, 55(4), 1705–1765. — Treatment of pattern recognition in price data as a statistical question.
  3. Andrew W. Lo (2004). "The Adaptive Markets Hypothesis." Journal of Portfolio Management, 30(5), 15–29. — Why simple direction predictions have no reliable edge, and why honest framing matters.
  4. Asness, C., Moskowitz, T., & Pedersen, L. (2013). "Value and Momentum Everywhere." Journal of Finance, 68(3), 929–985. — The momentum factor used in our cross‑sectional ranking.
  5. Hastie, T., Tibshirani, R., & Friedman, J. The Elements of Statistical Learning — k‑nearest‑neighbors, logistic regression, and the principles of walk‑forward validation.

The bottom line

Markets are hard. Honest analytics on top of public price data can give you useful context — distributions, regimes, rankings — but they cannot reliably tell anyone what to buy. Anyone who claims otherwise is selling something else. Stock View's value is in showing you what the data actually says, measuring how well it knows, and refusing to overclaim. That's the whole product, and that's why the methodology is published rather than hidden.

Decision support, not investment advice. Stock View provides market data visualization and statistical analytics for educational and informational purposes only. It does not provide investment, financial, or trading advice, and is not a registered investment advisor. Past performance does not guarantee future results. Trading securities involves risk, including the possible loss of principal. Consult a qualified financial advisor before making investment decisions.