Buy, Sell, or Hold? (THG Stock Forecast)


The categorization of high dimensional data present a fascinating challenge to machine learning models as frequent number of highly correlated dimensions or attributes can affect the accuracy of classification model. In this paper, the problem of high dimensionality of stock exchange is investigated to predict the market trends by applying the principal component analysis (PCA) with linear regression. PCA can help to improve the predictive performance of machine learning methods while reducing the redundancy among the data. We evaluate Hanover Insurance prediction models with Ensemble Learning (ML) and Pearson Correlation1,2,3,4 and conclude that the THG 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 THG stock.


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

Key Points

  1. Is now good time to invest?
  2. Trust metric by Neural Network
  3. Fundemental Analysis with Algorithmic Trading

THG Target Price Prediction Modeling Methodology

Security indices are the main tools for evaluation of the status of financial markets. Moreover, a main part of the economy of any country is constituted of investment in stock markets. Therefore, investors could maximize the return of investment if it becomes possible to predict the future trend of stock market with appropriate methods. The nonlinearity and nonstationarity of financial series make their prediction complicated. This study seeks to evaluate the prediction power of machine-learning models in a stock market. We consider Hanover Insurance Stock Decision Process with Pearson Correlation where A is the set of discrete actions of THG 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(Pearson Correlation)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(Ensemble Learning (ML)) X S(n):→ (n+16 weeks) i = 1 n a i

n:Time series to forecast

p:Price signals of THG 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?

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

Sample Set: Neural Network
Stock/Index: THG Hanover Insurance
Time series to forecast n: 11 Sep 2022 for (n+16 weeks)

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

Hanover Insurance assigned short-term B3 & long-term Ba2 forecasted stock rating. We evaluate the prediction models Ensemble Learning (ML) with Pearson Correlation1,2,3,4 and conclude that the THG 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 THG stock.

Financial State Forecast for THG Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B3Ba2
Operational Risk 3667
Market Risk4785
Technical Analysis6185
Fundamental Analysis4333
Risk Unsystematic5176

Prediction Confidence Score

Trust metric by Neural Network: 76 out of 100 with 603 signals.

References

  1. Barrett, C. B. (1997), "Heteroscedastic price forecasting for food security management in developing countries," Oxford Development Studies, 25, 225–236.
  2. M. Sobel. The variance of discounted Markov decision processes. Applied Probability, pages 794–802, 1982
  3. Mnih A, Hinton GE. 2007. Three new graphical models for statistical language modelling. In International Conference on Machine Learning, pp. 641–48. La Jolla, CA: Int. Mach. Learn. Soc.
  4. Matzkin RL. 1994. Restrictions of economic theory in nonparametric methods. In Handbook of Econometrics, Vol. 4, ed. R Engle, D McFadden, pp. 2523–58. Amsterdam: Elsevier
  5. G. Theocharous and A. Hallak. Lifetime value marketing using reinforcement learning. RLDM 2013, page 19, 2013
  6. Chen, C. L. Liu (1993), "Joint estimation of model parameters and outlier effects in time series," Journal of the American Statistical Association, 88, 284–297.
  7. Athey S, Imbens G. 2016. Recursive partitioning for heterogeneous causal effects. PNAS 113:7353–60
Frequently Asked QuestionsQ: What is the prediction methodology for THG stock?
A: THG stock prediction methodology: We evaluate the prediction models Ensemble Learning (ML) and Pearson Correlation
Q: Is THG stock a buy or sell?
A: The dominant strategy among neural network is to Buy THG Stock.
Q: Is Hanover Insurance stock a good investment?
A: The consensus rating for Hanover Insurance is Buy and assigned short-term B3 & long-term Ba2 forecasted stock rating.
Q: What is the consensus rating of THG stock?
A: The consensus rating for THG is Buy.
Q: What is the prediction period for THG stock?
A: The prediction period for THG is (n+16 weeks)

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