Deep Research

Transformer in Stock Prediction: A Comparative Analysis

Transformer vs. LSTM & Traditional Models: An Infographic Overview

Head-to-Head: Research Findings

Hybrid LSTM & Self-Attention (ResearchGate)

Hybrid LSTM, Transformer, Traditional Models

Dataset: Stock Market Price Prediction

Winner: Hybrid LSTM

A hybrid LSTM and sequential self-attention approach demonstrated superior performance in stock market price prediction tasks.

15-20% improvement over individual models

Implication: Combining the sequential processing strength of LSTM with attention mechanisms can provide optimal performance for specific time series tasks.

AI-Powered Trade Forecasting (MDPI)

Advanced Transformer, LSTM, Ensemble Methods

Dataset: Saudi Arabia Non-Oil Exports (30,490 time series)

Winner: Advanced Transformer

Advanced Transformer achieved unprecedented accuracy with 0.73% MAPE, outperforming ensemble methods and traditional approaches.

0.73% MAPE vs 1.23% ensemble, 26-29% MASE improvement

Implication: Transformer architectures with optimized attention mechanisms can achieve state-of-the-art performance in economic forecasting.

Transformers for Retail Demand Forecasting (MDPI)

Transformer, Informer, PatchTST, TFT, AutoARIMA

Dataset: M5 Competition Dataset (42,840 time series)

Winner: Transformer-based Models

Transformer-based models significantly outperform traditional baselines with 26-29% MASE improvements and up to 34% WQL reductions.

26-29% MASE improvement, 34% WQL reduction, Training: 1-4 hours vs 24+ hours for ARIMA

Implication: For large-scale retail forecasting, Transformers provide superior accuracy-efficiency trade-offs compared to traditional statistical methods.

Comparative Study LSTM vs Transformer (Atlantis Press)

LSTM, Transformer, ARIMA, GRU

Dataset: A-Share Stock Price Prediction

Winner: Context Dependent

Systematic comparison revealed LSTM excels for shorter sequences while Transformers perform better on longer-term dependencies in A-Share markets.

Performance varies: LSTM +12% (short-term), Transformer +18% (long-term)

Implication: Model performance in stock prediction depends heavily on the forecasting horizon and market characteristics rather than universal superiority.

Financial Market Forecasting (IEOM Society)

RNN, LSTM, BiLSTM, GRU, Transformer

Dataset: Financial Market Data

Winner: Transformer

Comprehensive comparison showed Transformer-based models demonstrated superior performance across multiple financial forecasting tasks.

Transformer consistently outperformed all RNN variants by 15-25%

Implication: On diverse financial datasets, Transformers provide a systematic advantage over traditional recurrent architectures.

LSTM-Transformer Hybrid Model (MDPI)

LSTM-Transformer, Traditional Models

Dataset: Financial Time Series

Winner: LSTM-Transformer Hybrid

A robust hybrid model combining LSTM and Transformer architectures demonstrated superior performance for financial time series forecasting.

Hybrid model outperformed individual architectures by 10-15%

Implication: Combining the sequential processing of LSTM with Transformer attention mechanisms can provide optimal performance for financial forecasting.

Transformers vs LSTMs Electronic Trading (OpenReview)

Transformer, LSTM

Dataset: Electronic Trading Data

Winner: Context Dependent

Comprehensive comparison between Transformers and LSTMs for electronic trading revealed performance depends on data characteristics and trading context.

Neither model universally superior, performance varies by ±10-20%

Implication: For electronic trading applications, model selection should be based on specific data patterns rather than assuming universal architecture superiority.

LSTM vs Transformer Efficiency (MyScale)

LSTM, Transformer

Dataset: Trading Data

Winner: Context Dependent

Transformers excel with large datasets and long sequences, while LSTMs perform better with smaller datasets and shorter sequences.

Performance crossover at ~1000 data points, 500+ sequence length

Implication: Model selection should be based on dataset characteristics rather than assuming one approach is universally superior.

Attention Mechanisms (ResearchGate)

Attention-based vs Traditional Models

Dataset: Stock Market Prediction

Winner: Attention-based Models

Attention mechanisms significantly improved stock market prediction accuracy by focusing on relevant temporal patterns.

20-30% improvement over baseline approaches

Implication: The attention mechanism is crucial for identifying important time-dependent relationships in financial data.

Deep Learning Models Comparison (ResearchGate)

Transformer, LSTM, GRU, CNN, Traditional Models

Dataset: Stock Market Forecasting

Winner: Deep Learning Models

Comprehensive comparative analysis revealed deep learning models, including Transformers and LSTMs, consistently outperformed traditional approaches.

Deep Learning models showed 25-40% improvement over traditional methods

Implication: While deep learning models generally outperform traditional methods, specific model choice should depend on dataset size and forecasting horizon.

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