Dynamic Energy Cascading Model for Stock Price Prediction in Enterprise Association Networks

Enterprise performance in real-world markets is shaped by dynamic factors, including competitors, collaborators, and hidden associates. Existing models struggle to capture the interplay between time-varying network dynamics and financial asset price movements. Traditional energy cascading models rely on static network assumptions, while deep learning approaches lack the incorporation of key network science principles such as structural balance and assortativity degree. To address these gaps, we propose the Dynamic Energy Cascading Model (DECM), a framework that models the propagation of business influence within dynamic enterprise networks. This method first constructs a dynamic enterprise association network, then applies an energy cascading mechanism to this network, utilizing the propagated energy metrics as predictive indicators for stock price forecasting. Unlike existing approaches, DECM uniquely integrates dynamic network properties and knowledge structures, such as structural balance and assortativity degree, to model the cascading effects of business influences on stock prices. Through extensive evaluations using data from S&P 500 companies, we demonstrate that DECM significantly outperforms conventional models in predictive precision. A key innovation of our work lies in identifying the critical role of assortativity degree in predicting stock price movements, which surpasses the impact of structural balance. These findings not only advance the theoretical understanding of enterprise performance dynamics but also provide actionable insights for policymakers and practitioners from a network science perspective.