How accurate is machine learning in stock market? (LON:REL Stock Forecast)

Complex networks in stock market and stock price volatility pattern prediction are the important issues in stock price research. Previous studies have used historical information regarding a single stock to predict the future trend of the stock's price, seldom considering comovement among stocks in the same market. In this study, in order to extract the information about relation stocks for prediction, we try to combine the complex network method with machine learning to predict stock price patterns. We evaluate RELX PLC prediction models with Supervised Machine Learning (ML) and Wilcoxon Rank-Sum Test^1,2,3,4 and conclude that the LON:REL stock is predictable in the short/long term. According to price forecasts for (n+1 year) period: The dominant strategy among neural network is to Sell LON:REL stock.

Keywords: LON:REL, RELX PLC, stock forecast, machine learning based prediction, risk rating, buy-sell behaviour, stock analysis, target price analysis, options and futures.

Key Points

1. Can we predict stock market using machine learning?
2. What are the most successful trading algorithms?
3. Technical Analysis with Algorithmic Trading

LON:REL Target Price Prediction Modeling Methodology

Three networks are compared for low false alarm stock trend predictions. Short-term trends, particularly attractive for neural network analysis, can be used profitably in scenarios such as option trading, but only with significant risk. Therefore, we focus on limiting false alarms, which improves the risk/reward ratio by preventing losses. To predict stock trends, we exploit time delay, recurrent, and probabilistic neural networks (TDNN, RNN, and PNN, respectively), utilizing conjugate gradient and multistream extended Kalman filter training for TDNN and RNN. We consider RELX PLC Stock Decision Process with Wilcoxon Rank-Sum Test where A is the set of discrete actions of LON:REL 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(Wilcoxon Rank-Sum Test)^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(Supervised Machine Learning (ML)) X S(n):→ (n+1 year) $\begin{array}{l}\int e^x\mathrm{rx}\end{array}$

n:Time series to forecast

p:Price signals of LON:REL 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?

LON:REL Stock Forecast (Buy or Sell) for (n+1 year)

Sample Set: Neural Network
Stock/Index: LON:REL RELX PLC
Time series to forecast n: 18 Sep 2022 for (n+1 year)

According to price forecasts for (n+1 year) period: The dominant strategy among neural network is to Sell LON:REL 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

RELX PLC assigned short-term B1 & long-term B2 forecasted stock rating. We evaluate the prediction models Supervised Machine Learning (ML) with Wilcoxon Rank-Sum Test^1,2,3,4 and conclude that the LON:REL stock is predictable in the short/long term. According to price forecasts for (n+1 year) period: The dominant strategy among neural network is to Sell LON:REL stock.

Financial State Forecast for LON:REL Stock Options & Futures

Rating	Short-Term	Long-Term Senior
Outlook*	B1	B2
Operational Risk	69	32
Market Risk	85	52
Technical Analysis	58	66
Fundamental Analysis	51	37
Risk Unsystematic	38	66

Prediction Confidence Score

Trust metric by Neural Network: 88 out of 100 with 722 signals.

References

1. Athey S, Imbens G, Wager S. 2016a. Efficient inference of average treatment effects in high dimensions via approximate residual balancing. arXiv:1604.07125 [math.ST]
2. Byron, R. P. O. Ashenfelter (1995), "Predicting the quality of an unborn grange," Economic Record, 71, 40–53.
3. Kallus N. 2017. Balanced policy evaluation and learning. arXiv:1705.07384 [stat.ML]
4. E. Collins. Using Markov decision processes to optimize a nonlinear functional of the final distribution, with manufacturing applications. In Stochastic Modelling in Innovative Manufacturing, pages 30–45. Springer, 1997
5. L. Prashanth and M. Ghavamzadeh. Actor-critic algorithms for risk-sensitive MDPs. In Proceedings of Advances in Neural Information Processing Systems 26, pages 252–260, 2013.
6. Athey S, Imbens G, Wager S. 2016a. Efficient inference of average treatment effects in high dimensions via approximate residual balancing. arXiv:1604.07125 [math.ST]
7. Scott SL. 2010. A modern Bayesian look at the multi-armed bandit. Appl. Stoch. Models Bus. Ind. 26:639–58

Frequently Asked Questions

Q: What is the prediction methodology for LON:REL stock?
A: LON:REL stock prediction methodology: We evaluate the prediction models Supervised Machine Learning (ML) and Wilcoxon Rank-Sum Test
Q: Is LON:REL stock a buy or sell?
A: The dominant strategy among neural network is to Sell LON:REL Stock.
Q: Is RELX PLC stock a good investment?
A: The consensus rating for RELX PLC is Sell and assigned short-term B1 & long-term B2 forecasted stock rating.
Q: What is the consensus rating of LON:REL stock?
A: The consensus rating for LON:REL is Sell.
Q: What is the prediction period for LON:REL stock?
A: The prediction period for LON:REL is (n+1 year)

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