Modelling A.I. in Economics

Buy or Sell: Bovespa Index Stock (Forecast)

Stock market trading is an activity in which investors need fast and accurate information to make effective decisions. Since many stocks are traded on a stock exchange, numerous factors influence the decision-making process. Moreover, the behaviour of stock prices is uncertain and hard to predict. For these reasons, stock price prediction is an important process and a challenging one. We evaluate Bovespa Index prediction models with Deductive Inference (ML) and Polynomial Regression1,2,3,4 and conclude that the Bovespa Index stock is predictable in the short/long term. According to price forecasts for (n+16 weeks) period: The dominant strategy among neural network is to Buy Bovespa Index stock.


Keywords: Bovespa Index, Bovespa Index, stock forecast, machine learning based prediction, risk rating, buy-sell behaviour, stock analysis, target price analysis, options and futures.

Key Points

  1. Technical Analysis with Algorithmic Trading
  2. Can statistics predict the future?
  3. How do predictive algorithms actually work?

Bovespa Index Target Price Prediction Modeling Methodology

Recurrent Neural Networks (RNNs) is a sub type of neural networks that use feedback connections. Several types of RNN models are used in predicting financial time series. This study was conducted to develop models to predict daily stock prices based on Recurrent Neural Network (RNN) Approach and to measure the accuracy of the models developed and identify the shortcomings of the models if present. We consider Bovespa Index Stock Decision Process with Polynomial Regression where A is the set of discrete actions of Bovespa Index 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(Polynomial Regression)5,6,7= p a 1 p a 2 p 1 n p j 1 p j 2 p j n p k 1 p k 2 p k n p n 1 p n 2 p n n X R(Deductive Inference (ML)) X S(n):→ (n+16 weeks) S = s 1 s 2 s 3

n:Time series to forecast

p:Price signals of Bovespa Index 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?

Bovespa Index Stock Forecast (Buy or Sell) for (n+16 weeks)

Sample Set: Neural Network
Stock/Index: Bovespa Index Bovespa Index
Time series to forecast n: 10 Sep 2022 for (n+16 weeks)

According to price forecasts for (n+16 weeks) period: The dominant strategy among neural network is to Buy Bovespa Index 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

Bovespa Index assigned short-term B2 & long-term Ba3 forecasted stock rating. We evaluate the prediction models Deductive Inference (ML) with Polynomial Regression1,2,3,4 and conclude that the Bovespa Index stock is predictable in the short/long term. According to price forecasts for (n+16 weeks) period: The dominant strategy among neural network is to Buy Bovespa Index stock.

Financial State Forecast for Bovespa Index Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B2Ba3
Operational Risk 3156
Market Risk6159
Technical Analysis9081
Fundamental Analysis4267
Risk Unsystematic5155

Prediction Confidence Score

Trust metric by Neural Network: 86 out of 100 with 832 signals.

References

  1. L. Busoniu, R. Babuska, and B. D. Schutter. A comprehensive survey of multiagent reinforcement learning. IEEE Transactions of Systems, Man, and Cybernetics Part C: Applications and Reviews, 38(2), 2008.
  2. Dimakopoulou M, Athey S, Imbens G. 2017. Estimation considerations in contextual bandits. arXiv:1711.07077 [stat.ML]
  3. J. Spall. Multivariate stochastic approximation using a simultaneous perturbation gradient approximation. IEEE Transactions on Automatic Control, 37(3):332–341, 1992.
  4. J. Baxter and P. Bartlett. Infinite-horizon policy-gradient estimation. Journal of Artificial Intelligence Re- search, 15:319–350, 2001.
  5. Wooldridge JM. 2010. Econometric Analysis of Cross Section and Panel Data. Cambridge, MA: MIT Press
  6. Li L, Chu W, Langford J, Moon T, Wang X. 2012. An unbiased offline evaluation of contextual bandit algo- rithms with generalized linear models. In Proceedings of 4th ACM International Conference on Web Search and Data Mining, pp. 297–306. New York: ACM
  7. Challen, D. W. A. J. Hagger (1983), Macroeconomic Systems: Construction, Validation and Applications. New York: St. Martin's Press.
Frequently Asked QuestionsQ: What is the prediction methodology for Bovespa Index stock?
A: Bovespa Index stock prediction methodology: We evaluate the prediction models Deductive Inference (ML) and Polynomial Regression
Q: Is Bovespa Index stock a buy or sell?
A: The dominant strategy among neural network is to Buy Bovespa Index Stock.
Q: Is Bovespa Index stock a good investment?
A: The consensus rating for Bovespa Index is Buy and assigned short-term B2 & long-term Ba3 forecasted stock rating.
Q: What is the consensus rating of Bovespa Index stock?
A: The consensus rating for Bovespa Index is Buy.
Q: What is the prediction period for Bovespa Index stock?
A: The prediction period for Bovespa Index is (n+16 weeks)

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