The application of Geometric Brownian Motion in stock forecasting during the coronavirus outbreak in Indonesia

Abstract

Geometric Brownian Motion is a mathematical model that can be used in stock price forecasting. This research aimed to predict the stock prices during the outbreak of coronavirus in Indonesia. There are four important steps of this research, such as calculating the return of the stocks, analyzing the normality test of stock price return, forecasting the stock price by using Geometric Brownian Motion, and calculating the errors of the forecasting. Based on the research, the MAPE for three forecasted stock prices is mostly around 10%.