Modelling A.I. in Economics

How accurate is machine learning in stock market? (FHN Stock Forecast) (Forecast)

Stock market prediction is a major exertion in the field of finance and establishing businesses. Stock market is totally uncertain as the prices of stocks keep fluctuating on a daily basis because of numerous factors that influence it. One of the traditional ways of predicting stock prices was by using only historical data. But with time it was observed that other factors such as peoples' sentiments and other news events occurring in and around the country affect the stock market, for e.g. national elections, natural calamity etc. We evaluate First Horizon prediction models with Modular Neural Network (Financial Sentiment Analysis) and ElasticNet Regression1,2,3,4 and conclude that the FHN stock is predictable in the short/long term. According to price forecasts for (n+4 weeks) period: The dominant strategy among neural network is to Hold FHN stock.


Keywords: FHN, First Horizon, stock forecast, machine learning based prediction, risk rating, buy-sell behaviour, stock analysis, target price analysis, options and futures.

Key Points

  1. Investment Risk
  2. How can neural networks improve predictions?
  3. Reaction Function

FHN Target Price Prediction Modeling Methodology

With technological advancements, big data can be easily generated and collected in many applications. Embedded in these big data are useful information and knowledge that can be discovered by machine learning and data mining models, techniques or algorithms. We consider First Horizon Stock Decision Process with ElasticNet Regression where A is the set of discrete actions of FHN 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(ElasticNet 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 (Financial Sentiment Analysis)) X S(n):→ (n+4 weeks) i = 1 n r i

n:Time series to forecast

p:Price signals of FHN 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?

FHN Stock Forecast (Buy or Sell) for (n+4 weeks)

Sample Set: Neural Network
Stock/Index: FHN First Horizon
Time series to forecast n: 09 Sep 2022 for (n+4 weeks)

According to price forecasts for (n+4 weeks) period: The dominant strategy among neural network is to Hold FHN 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

First Horizon assigned short-term B2 & long-term B3 forecasted stock rating. We evaluate the prediction models Modular Neural Network (Financial Sentiment Analysis) with ElasticNet Regression1,2,3,4 and conclude that the FHN stock is predictable in the short/long term. According to price forecasts for (n+4 weeks) period: The dominant strategy among neural network is to Hold FHN stock.

Financial State Forecast for FHN Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B2B3
Operational Risk 3937
Market Risk7766
Technical Analysis4438
Fundamental Analysis3750
Risk Unsystematic7940

Prediction Confidence Score

Trust metric by Neural Network: 84 out of 100 with 881 signals.

References

  1. M. Petrik and D. Subramanian. An approximate solution method for large risk-averse Markov decision processes. In Proceedings of the 28th International Conference on Uncertainty in Artificial Intelligence, 2012.
  2. 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
  3. Sutton RS, Barto AG. 1998. Reinforcement Learning: An Introduction. Cambridge, MA: MIT Press
  4. Abadie A, Imbens GW. 2011. Bias-corrected matching estimators for average treatment effects. J. Bus. Econ. Stat. 29:1–11
  5. Künzel S, Sekhon J, Bickel P, Yu B. 2017. Meta-learners for estimating heterogeneous treatment effects using machine learning. arXiv:1706.03461 [math.ST]
  6. Jiang N, Li L. 2016. Doubly robust off-policy value evaluation for reinforcement learning. In Proceedings of the 33rd International Conference on Machine Learning, pp. 652–61. La Jolla, CA: Int. Mach. Learn. Soc.
  7. T. Morimura, M. Sugiyama, M. Kashima, H. Hachiya, and T. Tanaka. Nonparametric return distribution ap- proximation for reinforcement learning. In Proceedings of the 27th International Conference on Machine Learning, pages 799–806, 2010
Frequently Asked QuestionsQ: What is the prediction methodology for FHN stock?
A: FHN stock prediction methodology: We evaluate the prediction models Modular Neural Network (Financial Sentiment Analysis) and ElasticNet Regression
Q: Is FHN stock a buy or sell?
A: The dominant strategy among neural network is to Hold FHN Stock.
Q: Is First Horizon stock a good investment?
A: The consensus rating for First Horizon is Hold and assigned short-term B2 & long-term B3 forecasted stock rating.
Q: What is the consensus rating of FHN stock?
A: The consensus rating for FHN is Hold.
Q: What is the prediction period for FHN stock?
A: The prediction period for FHN is (n+4 weeks)

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