Associate Professor Xiaohang Ren, a researcher of the Base, has published a collaborative paper titled "Seeing is believing: Forecasting crude oil price trend fromthe perspective of images" in Journal of Forecasting.

The Journal of Forecasting mainly publishes papers on theories, practices, calculations, and methods, covering forecasting in all fields: statistics, economics, psychology, systems engineering, and social sciences.

Abstract: In this paper, we propose a novel imaging method to forecast the daily price data of West Texas Intermediate (WTI) crude oil futures. We use convolutional neural networks (CNNs) for future price trend prediction and obtain higher prediction accuracy than other benchmark forecasting methods. The results show that images can contain more nonlinear information, which is beneficial for energy price forecasting. Nonlinear factors also have a strong influence during drastic fluctuations in crude oil prices. In the robustness tests, we find that the image-based CNN is the most stable approach and can be applied in various futures forecasting scenarios. In the prediction of low-frequency models for high-frequency data, the CNN method still retains considerable predictive power, indicating the possibility of transfer learning of our novel approach. By unleashing the power of the picture, we open up a whole new perspective for forecasting future energy trends.

Keywords: convolutional neural network, energy price forecasting, image classification, machine learning, oil price trend

Link：https://doi.org/10.1002/for.3149

Teacher profile

Xiaohang Ren is a specially appointed associate professor at the Business School of Central South University, a highly cited Chinese scholar of Elsevier, and a top 2% scientist in the world. He mainly focuses on research in energy finance, financial risks, and financial measurement. He has published more than 100 papers in authoritative domestic and foreign journals such as Journal of the American Statistical Association, Transportation Research Part A, Energy Economics, Quantitative Finance, Review of Quantitative Finance and Accounting, International Review of Financial Analysis, Technological Forecasting and Social Change, Business Strategy and the Environment, Pacific-Basin Finance Journal, Applied Energy, Resources Policy, Renewable & Sustainable Energy Review, Energy, Journal of Management Sciences in China (English Edition), Systems Engineering - Theory & Practice, and Chinese Journal of Management Science. Among them, more than 30 papers are ESI hot articles or highly cited papers. He serves as the lead editor of Sustainable Communities (Taylor & Francis), associate editor of Humanities & Social Sciences Communications (the only social science and humanities journal affiliated with Nature), and guest editor of SSCI journals such as Climate Change Economics, Economic Change and Restructuring.