Abstract

We evaluate American Electric Power prediction models with Trend and Paired T-Test1,2,3,4 and conclude that the AEP stock is predictable in the short/long term. According to price forecasts for (n+4 weeks) period: The dominant strategy among neural network is to Sell AEP stock.

Keywords: AEP, American Electric Power, stock forecast, machine learning based prediction, risk rating, buy-sell behaviour, stock analysis, target price analysis, options and futures.

Key Points

1. What is Markov decision process in reinforcement learning?
2. How do you pick a stock?
3. What is the best way to predict stock prices?

AEP Target Price Prediction Modeling Methodology

We consider American Electric Power Stock Decision Process with Paired T-Test where A is the set of discrete actions of AEP stock holders, F is the set of discrete states, P : S × F × S → R is the transition probability distribution, R : S × F → R is the reaction function, and γ ∈ [0, 1] is a move factor for expectation.1,2,3,4

F(Paired T-Test)5,6,7= $\begin{array}{cccc}{p}_{a1}& {p}_{a2}& \dots & {p}_{1n}\\ & ⋮\\ {p}_{j1}& {p}_{j2}& \dots & {p}_{jn}\\ & ⋮\\ {p}_{k1}& {p}_{k2}& \dots & {p}_{kn}\\ & ⋮\\ {p}_{n1}& {p}_{n2}& \dots & {p}_{nn}\end{array}$ X R(Trend) X S(n):→ (n+4 weeks) $\begin{array}{l}\int {e}^{x}\mathrm{rx}\end{array}$

n:Time series to forecast

p:Price signals of AEP stock

j:Nash equilibria

k:Dominated move

a:Best response for target price

For further technical information as per how our model work we invite you to visit the article below:

How do AC Investment Research machine learning (predictive) algorithms actually work?

AEP Stock Forecast (Buy or Sell) for (n+4 weeks)

Sample Set: Neural Network
Stock/Index: AEP American Electric Power
Time series to forecast n: 31 Aug 2022 for (n+4 weeks)

According to price forecasts for (n+4 weeks) period: The dominant strategy among neural network is to Sell AEP stock.

X axis: *Likelihood% (The higher the percentage value, the more likely the event will occur.)

Y axis: *Potential Impact% (The higher the percentage value, the more likely the price will deviate.)

Z axis (Yellow to Green): *Technical Analysis%

Conclusions

American Electric Power assigned short-term Ba3 & long-term B2 forecasted stock rating. We evaluate the prediction models Trend with Paired T-Test1,2,3,4 and conclude that the AEP stock is predictable in the short/long term. According to price forecasts for (n+4 weeks) period: The dominant strategy among neural network is to Sell AEP stock.

Financial State Forecast for AEP Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*Ba3B2
Operational Risk 8243
Market Risk7640
Technical Analysis6362
Fundamental Analysis3770
Risk Unsystematic7050

Prediction Confidence Score

Trust metric by Neural Network: 76 out of 100 with 852 signals.

References

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2. Bamler R, Mandt S. 2017. Dynamic word embeddings via skip-gram filtering. In Proceedings of the 34th Inter- national Conference on Machine Learning, pp. 380–89. La Jolla, CA: Int. Mach. Learn. Soc.
3. S. Devlin, L. Yliniemi, D. Kudenko, and K. Tumer. Potential-based difference rewards for multiagent reinforcement learning. In Proceedings of the Thirteenth International Joint Conference on Autonomous Agents and Multiagent Systems, May 2014
4. Ashley, R. (1988), "On the relative worth of recent macroeconomic forecasts," International Journal of Forecasting, 4, 363–376.
5. Barkan O. 2016. Bayesian neural word embedding. arXiv:1603.06571 [math.ST]
6. Andrews, D. W. K. W. Ploberger (1994), "Optimal tests when a nuisance parameter is present only under the alternative," Econometrica, 62, 1383–1414.
7. J. G. Schneider, W. Wong, A. W. Moore, and M. A. Riedmiller. Distributed value functions. In Proceedings of the Sixteenth International Conference on Machine Learning (ICML 1999), Bled, Slovenia, June 27 - 30, 1999, pages 371–378, 1999.
Frequently Asked QuestionsQ: What is the prediction methodology for AEP stock?
A: AEP stock prediction methodology: We evaluate the prediction models Trend and Paired T-Test
Q: Is AEP stock a buy or sell?
A: The dominant strategy among neural network is to Sell AEP Stock.
Q: Is American Electric Power stock a good investment?
A: The consensus rating for American Electric Power is Sell and assigned short-term Ba3 & long-term B2 forecasted stock rating.
Q: What is the consensus rating of AEP stock?
A: The consensus rating for AEP is Sell.
Q: What is the prediction period for AEP stock?
A: The prediction period for AEP is (n+4 weeks)