Stock Price Forecasting for Jordan Insurance Companies Amid the COVID-19 Pandemic Utilizing Off-the-Shelf Technical Analysis Methods
, Ahmad S. Tarawneh 3, Ahmad Abadleh 2, Malek Alrashidi 4 and Mansoor Alghamdi 4Round 1
Reviewer 1 Report
Manuscript ID: economies-1557891
Article Title: Stock Price Forecasting for Jordan Insurance Companies Amid the COVID-19 Pandemic Utilizing Off-The-Shelf Technical Analysis Methods
Review Report
Recommendation: I would recommend this article for publication pending REVISIONS. The paper is very interesting and warrants publication.
The paper is consistent with MDPI ECONOMIES and fits in with the overall journal scope. More specifically, it was submitted to the Special Issue “The Impact of COVID-19 on Financial Markets and the Real Economy” which it also fits in very well with.
The paper looks at how to improve the forecasting and predicting of finance. The study looks at the use of technical analysis methods to forecast Jordanian insurance companies specific to their performance during the COVID-19 pandemic. Several experiments were conducted on the daily stock prices of ten insurance companies collected by the Amman Stock Exchange. The experimental results show that the non-parametric Exponential Decay Weighted Average (EDWA) has higher forecasting capabilities than some of the more popular forecasting strategies like Simple Moving Average, Weighted Moving Average, and Exponential Smoothing. As a result, the research showed that using EDWA to forecast the share price of insurance companies in Jordan is good practice. From a technical analysis perspective, the research also showed the pandemic had direct effects on Jordanian insurance enterprises.
First, the lit. rev. and references are very well done—compliments to the authors. The topic is very well presented and written very well. Ample references are used which is needed in this type of study. After studying the equations and calculations the methods are well done and sound. The three technical analysis tools used are an excellent starting point for this research and the initial data shows a sound time series of datasets. The attempt to forecast is performed well and properly justified with references.
The paper is relevant and interesting and shows promise. Sufficient background into the topic has been presented.
Abstract
-sufficient
- Introduction
-sufficient
- Literature
-lit. rev. –well-written. I would suggest writing more on forecasting practitioners. Lines 166-172, this paragraph should be expanded. It is very important to the paper.
- Materials and Methods
-the formulae are sound and well-done.
-the tables presented aid with the readers’ ability to quickly grasp the concepts. So this was also well-done. The formulae are correct.
- Results and Discussion
-insufficient
The results are well done – overall. Compliments to the authors.
-the authors should better explain and discuss the results, so as to, integrate the important literature in the field and present some argument and dialogue regarding the importance of the research. Why is this research worthy of publication? Explain the results and compare them with other related findings.
Figure 5 should be full size, i.e., the page width, it is too small using MDPI’s indented page size.
- Conclusion
-The authors should highlight current limitations of their study, and briefly mention some precise directions (future ideas) for the work.
Finally, another good read through of the paper is needed to fix some English errors. All in all, I would like to thank the authors for submitting a quality manuscript.
Author Response
Recommendation: I would recommend this article for publication pending REVISIONS. The paper is very interesting and warrants publication.
The paper is consistent with MDPI ECONOMIES and fits in with the overall journal scope. More specifically, it was submitted to the Special Issue “The Impact of COVID-19 on Financial Markets and the Real Economy” which it also fits in very well with.
The paper looks at how to improve the forecasting and predicting of finance. The study looks at the use of technical analysis methods to forecast Jordanian insurance companies specific to their performance during the COVID-19 pandemic. Several experiments were conducted on the daily stock prices of ten insurance companies collected by the Amman Stock Exchange. The experimental results show that the non-parametric Exponential Decay Weighted Average (EDWA) has higher forecasting capabilities than some of the more popular forecasting strategies like Simple Moving Average, Weighted Moving Average, and Exponential Smoothing. As a result, the research showed that using EDWA to forecast the share price of insurance companies in Jordan is good practice. From a technical analysis perspective, the research also showed the pandemic had direct effects on Jordanian insurance enterprises.
First, the lit. rev. and references are very well done—compliments to the authors. The topic is very well presented and written very well. Ample references are used which is needed in this type of study. After studying the equations and calculations the methods are well done and sound. The three technical analysis tools used are an excellent starting point for this research and the initial data shows a sound time series of datasets. The attempt to forecast is performed well and properly justified with references.
The paper is relevant and interesting and shows promise. Sufficient background into the topic has been presented.
Response: Thank you for these encouraging comments.
Abstract
-sufficient
Response: Thank you.
- Introduction
-sufficient
Response: Thank you.
- Literature
-lit. rev. –well-written. I would suggest writing more on forecasting practitioners. Lines 166-172, this paragraph should be expanded. It is very important to the paper.
Response: Thank you for this comment, we added 3 paragraphs expanding the mentioned paragraph, reviewing 5 more related papers.
- Materials and Methods
-the formulae are sound and well-done.
-the tables presented aid with the readers’ ability to quickly grasp the concepts. So this was also well-done. The formulae are correct.
Response: Thank you for the encouraging comments.
- Results and Discussion
-insufficient
The results are well done – overall. Compliments to the authors.
-the authors should better explain and discuss the results, so as to, integrate the important literature in the field and present some argument and dialogue regarding the importance of the research. Why is this research worthy of publication? Explain the results and compare them with other related findings.
Response: We added more experiments on data before and after the pandemic using the top forecasters, and we described the results in greater depth. We also backed up our findings with some similar studies that had positive results using technical analysis approaches.
Figure 5 should be full size, i.e., the page width, it is too small using MDPI’s indented page size.
Response: Yes, we resized the figure to the full possible size.
- Conclusion
-The authors should highlight current limitations of their study, and briefly mention some precise directions (future ideas) for the work.
Response: Yes, this was missing; we added two limitations of the study, which are: 1) the number of insurance companies tested was limited to ten, which represents half of the current insurance companies in Jordan. And 2) we only employed a few common technical analysis approaches, ignoring a vast number of cutting-edge machine learning methods such as deep learning forecasting methods. And we mentioned that we are going to address these issues in the future.
Finally, another good read through of the paper is needed to fix some English errors. All in all, I would like to thank the authors for submitting a quality manuscript.
Response: Thank you so much for your positive words; they have boosted our motivation to complete this revision. We have proofread the manuscript and addressed any language issues that we discovered.
Reviewer 2 Report
The paper researches on an interesting topic - stock prices in the context of insurance companies.
- While the paper considers sample range that specifically covers the COVID-19 period when applying the EDWA method, it would be useful to consider additional sample and split the sample analysis into before and after COVID-19 pandemic, and then full sample analysis. In doing so, we expect to get a better idea whether EDWA or other method of forecasting is better, and under which situation.
- The paper should inform the total number of listed insurance companies. The number of insurance companies selected should be representative of the total listed.
- Provide some basic statistics of the sample of insurance, such as market capitalization, share prices (opening-closing), dividend yields, EPS, PE-ratio etc.
- On page 11, line 331-332 contains statement that seems disconnected to the paper. Please have a re-look.
- Highlight some limitations of the study, especially in terms of the method used.
Author Response
The paper researches on an interesting topic - stock prices in the context of insurance companies.
Response: Thank you very much for all of your comments that made our paper much better for publication.
- While the paper considers sample range that specifically covers the COVID-19 period when applying the EDWA method, it would be useful to consider additional sample and split the sample analysis into before and after COVID-19 pandemic, and then full sample analysis. In doing so, we expect to get a better idea whether EDWA or other method of forecasting is better, and under which situation.
Response: We added more experiments on data before and after the pandemic using the top forecasters (EDWA and ES), and we described the results in greater depth. We also backed up our findings with some similar studies that had positive results using technical analysis approaches.
2. The paper should inform the total number of listed insurance companies. The number of insurance companies selected should be representative of the total listed.
Response: We informed that Jordan has a total of 20 insurance companies, and we chose 10 of them based on data availability.
3. Provide some basic statistics of the sample of insurance, such as market capitalization, share prices (opening-closing), dividend yields, EPS, PE-ratio etc.
Response: We provide all the available basic statistics of the sample of insurance including Market capitalization, High price, Low price, Closing price, Average price, Value traded, Turnover ratio, dividend, EPS.
4. On page 11, line 331-332 contains statement that seems disconnected to the paper. Please have a re-look.
Response: Sorry, this sentence was mistakenly left from the template of the journal.
5. Highlight some limitations of the study, especially in terms of the method used.
Response: Yes, this was missing; we added two limitations of the study, which are: 1) the number of insurance companies tested was limited to ten, which represents half of the current insurance companies in Jordan. And 2) we only employed a few common technical analysis approaches, ignoring a vast number of cutting-edge machine learning methods such as deep learning forecasting methods. And we mentioned that we are going to address these issues in the future.
Round 2
Reviewer 2 Report
The authors have addressed my concerns. All the best.
