Can neural networks predict stock market? (AWI Stock Forecast)


Development of linguistic technologies and penetration of social media provide powerful possibilities to investigate users' moods and psychological states of people. In this paper we discussed possibility to improve accuracy of stock market indicators predictions by using data about psychological states of Twitter users. For analysis of psychological states we used lexicon-based approach. We evaluate Armstrong World Industries prediction models with Multi-Instance Learning (ML) and Sign Test1,2,3,4 and conclude that the AWI stock is predictable in the short/long term. According to price forecasts for (n+6 month) period: The dominant strategy among neural network is to Sell AWI stock.


Keywords: AWI, Armstrong World Industries, stock forecast, machine learning based prediction, risk rating, buy-sell behaviour, stock analysis, target price analysis, options and futures.

Key Points

  1. Probability Distribution
  2. Market Outlook
  3. Can stock prices be predicted?

AWI Target Price Prediction Modeling Methodology

In this paper, we introduce a new prediction model depend on Bidirectional Gated Recurrent Unit (BGRU). Our predictive model relies on both online financial news and historical stock prices data to predict the stock movements in the future. We consider Armstrong World Industries Stock Decision Process with Sign Test where A is the set of discrete actions of AWI 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(Sign Test)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(Multi-Instance Learning (ML)) X S(n):→ (n+6 month) S = s 1 s 2 s 3

n:Time series to forecast

p:Price signals of AWI 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?

AWI Stock Forecast (Buy or Sell) for (n+6 month)

Sample Set: Neural Network
Stock/Index: AWI Armstrong World Industries
Time series to forecast n: 18 Sep 2022 for (n+6 month)

According to price forecasts for (n+6 month) period: The dominant strategy among neural network is to Sell AWI 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

Armstrong World Industries assigned short-term Ba3 & long-term B1 forecasted stock rating. We evaluate the prediction models Multi-Instance Learning (ML) with Sign Test1,2,3,4 and conclude that the AWI stock is predictable in the short/long term. According to price forecasts for (n+6 month) period: The dominant strategy among neural network is to Sell AWI stock.

Financial State Forecast for AWI Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*Ba3B1
Operational Risk 8757
Market Risk4279
Technical Analysis3740
Fundamental Analysis7241
Risk Unsystematic7676

Prediction Confidence Score

Trust metric by Neural Network: 75 out of 100 with 757 signals.

References

  1. C. Wu and Y. Lin. Minimizing risk models in Markov decision processes with policies depending on target values. Journal of Mathematical Analysis and Applications, 231(1):47–67, 1999
  2. Cortes C, Vapnik V. 1995. Support-vector networks. Mach. Learn. 20:273–97
  3. Morris CN. 1983. Parametric empirical Bayes inference: theory and applications. J. Am. Stat. Assoc. 78:47–55
  4. Andrews, D. W. K. (1993), "Tests for parameter instability and structural change with unknown change point," Econometrica, 61, 821–856.
  5. V. Mnih, K. Kavukcuoglu, D. Silver, A. Rusu, J. Veness, M. Bellemare, A. Graves, M. Riedmiller, A. Fidjeland, G. Ostrovski, S. Petersen, C. Beattie, A. Sadik, I. Antonoglou, H. King, D. Kumaran, D. Wierstra, S. Legg, and D. Hassabis. Human-level control through deep reinforcement learning. Nature, 518(7540):529–533, 02 2015.
  6. Chernozhukov V, Chetverikov D, Demirer M, Duflo E, Hansen C, et al. 2016a. Double machine learning for treatment and causal parameters. Tech. Rep., Cent. Microdata Methods Pract., Inst. Fiscal Stud., London
  7. Imbens GW, Lemieux T. 2008. Regression discontinuity designs: a guide to practice. J. Econom. 142:615–35
Frequently Asked QuestionsQ: What is the prediction methodology for AWI stock?
A: AWI stock prediction methodology: We evaluate the prediction models Multi-Instance Learning (ML) and Sign Test
Q: Is AWI stock a buy or sell?
A: The dominant strategy among neural network is to Sell AWI Stock.
Q: Is Armstrong World Industries stock a good investment?
A: The consensus rating for Armstrong World Industries is Sell and assigned short-term Ba3 & long-term B1 forecasted stock rating.
Q: What is the consensus rating of AWI stock?
A: The consensus rating for AWI is Sell.
Q: What is the prediction period for AWI stock?
A: The prediction period for AWI is (n+6 month)

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