Does algo trading work? (Dow Jones Industrial Average Index Stock Forecast)

Stock market prediction is the act of trying to determine the future value of a company stock or other financial instrument traded on a financial exchange. The successful prediction of a stock's future price will maximize investor's gains. This paper proposes a machine learning model to predict stock market price. We evaluate Dow Jones Industrial Average Index prediction models with Modular Neural Network (Market News Sentiment Analysis) and Polynomial Regression1,2,3,4 and conclude that the Dow Jones Industrial Average Index stock is predictable in the short/long term. According to price forecasts for (n+8 weeks) period: The dominant strategy among neural network is to Hold Dow Jones Industrial Average Index stock.


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

Key Points

  1. Game Theory
  2. Fundemental Analysis with Algorithmic Trading
  3. Understanding Buy, Sell, and Hold Ratings

Dow Jones Industrial Average Index Target Price Prediction Modeling Methodology

Machine learning addresses the question of how to build computers that improve automatically through experience. It is one of today's most rapidly growing technical fields, lying at the intersection of computer science and statistics, and at the core of artificial intelligence and data science. We consider Dow Jones Industrial Average Index Stock Decision Process with Polynomial Regression where A is the set of discrete actions of Dow Jones Industrial Average 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(Modular Neural Network (Market News Sentiment Analysis)) X S(n):→ (n+8 weeks) R = 1 0 0 0 1 0 0 0 1

n:Time series to forecast

p:Price signals of Dow Jones Industrial Average 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?

Dow Jones Industrial Average Index Stock Forecast (Buy or Sell) for (n+8 weeks)

Sample Set: Neural Network
Stock/Index: Dow Jones Industrial Average Index Dow Jones Industrial Average Index
Time series to forecast n: 09 Sep 2022 for (n+8 weeks)

According to price forecasts for (n+8 weeks) period: The dominant strategy among neural network is to Hold Dow Jones Industrial Average 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

Dow Jones Industrial Average Index assigned short-term B1 & long-term Ba3 forecasted stock rating. We evaluate the prediction models Modular Neural Network (Market News Sentiment Analysis) with Polynomial Regression1,2,3,4 and conclude that the Dow Jones Industrial Average Index stock is predictable in the short/long term. According to price forecasts for (n+8 weeks) period: The dominant strategy among neural network is to Hold Dow Jones Industrial Average Index stock.

Financial State Forecast for Dow Jones Industrial Average Index Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B1Ba3
Operational Risk 5069
Market Risk5447
Technical Analysis7780
Fundamental Analysis6773
Risk Unsystematic5041

Prediction Confidence Score

Trust metric by Neural Network: 85 out of 100 with 543 signals.

References

  1. Knox SW. 2018. Machine Learning: A Concise Introduction. Hoboken, NJ: Wiley
  2. V. Mnih, A. P. Badia, M. Mirza, A. Graves, T. P. Lillicrap, T. Harley, D. Silver, and K. Kavukcuoglu. Asynchronous methods for deep reinforcement learning. In Proceedings of the 33nd International Conference on Machine Learning, ICML 2016, New York City, NY, USA, June 19-24, 2016, pages 1928–1937, 2016
  3. Chernozhukov V, Demirer M, Duflo E, Fernandez-Val I. 2018b. Generic machine learning inference on heteroge- nous treatment effects in randomized experiments. NBER Work. Pap. 24678
  4. Mikolov T, Yih W, Zweig G. 2013c. Linguistic regularities in continuous space word representations. In Pro- ceedings of the 2013 Conference of the North American Chapter of the Association for Computational Linguistics: Human Language Technologies, pp. 746–51. New York: Assoc. Comput. Linguist.
  5. L. Panait and S. Luke. Cooperative multi-agent learning: The state of the art. Autonomous Agents and Multi-Agent Systems, 11(3):387–434, 2005.
  6. Ashley, R. (1983), "On the usefulness of macroeconomic forecasts as inputs to forecasting models," Journal of Forecasting, 2, 211–223.
  7. Barkan O. 2016. Bayesian neural word embedding. arXiv:1603.06571 [math.ST]
Frequently Asked QuestionsQ: What is the prediction methodology for Dow Jones Industrial Average Index stock?
A: Dow Jones Industrial Average Index stock prediction methodology: We evaluate the prediction models Modular Neural Network (Market News Sentiment Analysis) and Polynomial Regression
Q: Is Dow Jones Industrial Average Index stock a buy or sell?
A: The dominant strategy among neural network is to Hold Dow Jones Industrial Average Index Stock.
Q: Is Dow Jones Industrial Average Index stock a good investment?
A: The consensus rating for Dow Jones Industrial Average Index is Hold and assigned short-term B1 & long-term Ba3 forecasted stock rating.
Q: What is the consensus rating of Dow Jones Industrial Average Index stock?
A: The consensus rating for Dow Jones Industrial Average Index is Hold.
Q: What is the prediction period for Dow Jones Industrial Average Index stock?
A: The prediction period for Dow Jones Industrial Average Index is (n+8 weeks)

People also ask

What are the top stocks to invest in right now?
AC Invest mobile app lets you:

*See the machine learning based stock market analysis and AC Invest Rank which indicates potential outperformance based on earning estimate revisions and surprises.
*View the current market risk, operational risk and outlook.
*Get daily signal notifications.
*Get daily market risk notifications.
*View prediction confidence score.

301 Massachusetts Avenue Cambridge, MA 02139 667-253-1000 pr@ademcetinkaya.com


AC Invest Mobile App