Combined Utilization of Extreme Gradient Boosting and Portfolio Optimization on Vanguard S&P 500 ETF

Exchange-Traded Funds are essential instruments in global financial markets. Vanguard ETFs ranks as one of the most popular ETFs available. In exploring the potential of outperforming the market, this study investigates the efficacy of the extreme gradient boosting algorithm in the context of stock price prediction and portfolio optimization. The stocks considered for optimal allocation in outperforming the market include the top 10 stocks of the Vanguard ETF where the stock price predictions of those stocks are compared against historical data. The results indicate that while the extreme gradient boosting algorithm is effective in price prediction, its integration into portfolio optimization does not distinctly outperform its historical counterparts.