Can we predict stock market using machine learning? (ORA Stock Forecast)

In this paper, we propose a robust and novel hybrid model for prediction of stock returns. The proposed model is constituted of two linear models: autoregressive moving average model, exponential smoothing model and a non-linear model: recurrent neural network. Training data for recurrent neural network is generated by a new regression model. Recurrent neural network produces satisfactory predictions as compared to linear models. With the goal to further improve the accuracy of predictions, the proposed hybrid prediction model merges predictions obtained from these three prediction based models. We evaluate Ormat Technologies prediction models with Active Learning (ML) and Logistic Regression^1,2,3,4 and conclude that the ORA 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 Buy ORA stock.

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

Key Points

1. Operational Risk
2. Can neural networks predict stock market?
3. Prediction Modeling

ORA Target Price Prediction Modeling Methodology

With the advent of technological marvels like global digitization, the prediction of the stock market has entered a technologically advanced era, revamping the old model of trading. With the ceaseless increase in market capitalization, stock trading has become a center of investment for many financial investors. Many analysts and researchers have developed tools and techniques that predict stock price movements and help investors in proper decision-making. We consider Ormat Technologies Stock Decision Process with Logistic Regression where A is the set of discrete actions of ORA 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(Logistic Regression)^5,6,7= $\begin{array}{cccc}{p}_{\mathrm{a}1}& p_{\mathrm{a}2}& \dots & p_{1n}\\ & ⋮\\ p_{j1}& p_{j2}& \dots & p_{jn}\\ & ⋮\\ p_{k1}& p_{k2}& \dots & p_{kn}\\ & ⋮\\ p_{n1}& p_{n2}& \dots & p_{nn}\end{array}$ X R(Active Learning (ML)) X S(n):→ (n+6 month) $\sum _{i=1}^n\left(r_i\right)$

n:Time series to forecast

p:Price signals of ORA 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?

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

Sample Set: Neural Network
Stock/Index: ORA Ormat Technologies
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 Buy ORA 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

Ormat Technologies assigned short-term Ba3 & long-term Ba3 forecasted stock rating. We evaluate the prediction models Active Learning (ML) with Logistic Regression^1,2,3,4 and conclude that the ORA 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 Buy ORA stock.

Financial State Forecast for ORA Stock Options & Futures

Rating	Short-Term	Long-Term Senior
Outlook*	Ba3	Ba3
Operational Risk	55	69
Market Risk	32	56
Technical Analysis	81	62
Fundamental Analysis	84	53
Risk Unsystematic	66	70

Prediction Confidence Score

Trust metric by Neural Network: 74 out of 100 with 603 signals.

References

1. LeCun Y, Bengio Y, Hinton G. 2015. Deep learning. Nature 521:436–44
2. Arora S, Li Y, Liang Y, Ma T. 2016. RAND-WALK: a latent variable model approach to word embeddings. Trans. Assoc. Comput. Linguist. 4:385–99
3. Dimakopoulou M, Athey S, Imbens G. 2017. Estimation considerations in contextual bandits. arXiv:1711.07077 [stat.ML]
4. Sutton RS, Barto AG. 1998. Reinforcement Learning: An Introduction. Cambridge, MA: MIT Press
5. Mazumder R, Hastie T, Tibshirani R. 2010. Spectral regularization algorithms for learning large incomplete matrices. J. Mach. Learn. Res. 11:2287–322
6. M. L. Littman. Markov games as a framework for multi-agent reinforcement learning. In Ma- chine Learning, Proceedings of the Eleventh International Conference, Rutgers University, New Brunswick, NJ, USA, July 10-13, 1994, pages 157–163, 1994
7. V. Konda and J. Tsitsiklis. Actor-Critic algorithms. In Proceedings of Advances in Neural Information Processing Systems 12, pages 1008–1014, 2000

Frequently Asked Questions

Q: What is the prediction methodology for ORA stock?
A: ORA stock prediction methodology: We evaluate the prediction models Active Learning (ML) and Logistic Regression
Q: Is ORA stock a buy or sell?
A: The dominant strategy among neural network is to Buy ORA Stock.
Q: Is Ormat Technologies stock a good investment?
A: The consensus rating for Ormat Technologies is Buy and assigned short-term Ba3 & long-term Ba3 forecasted stock rating.
Q: What is the consensus rating of ORA stock?
A: The consensus rating for ORA is Buy.
Q: What is the prediction period for ORA stock?
A: The prediction period for ORA is (n+6 month)

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