Prediction of stock prices has been an important area of research for a long time. While supporters of the efficient market hypothesis believe that it is impossible to predict stock prices accurately, there are formal propositions demonstrating that accurate modeling and designing of appropriate variables may lead to models using which stock prices and stock price movement patterns can be very accurately predicted. We evaluate Jakarta Stock Exchange Composite Index prediction models with Modular Neural Network (Social Media Sentiment Analysis) and Spearman Correlation1,2,3,4 and conclude that the Jakarta Stock Exchange Composite Index stock is predictable in the short/long term. According to price forecasts for (n+16 weeks) period: The dominant strategy among neural network is to Hold Jakarta Stock Exchange Composite Index stock.

Keywords: Jakarta Stock Exchange Composite Index, Jakarta Stock Exchange Composite Index, stock forecast, machine learning based prediction, risk rating, buy-sell behaviour, stock analysis, target price analysis, options and futures.

## Key Points

1. Can statistics predict the future?
2. What is the use of Markov decision process?
3. What are main components of Markov decision process?

## Jakarta Stock Exchange Composite Index Target Price Prediction Modeling Methodology

Financial markets are fascinating if you can predict them. Also, the traders acting on financial markets produce a vast amount of information to analyse the consequences of investing according to the current market trends. Stock Market prediction is the technique to determine whether stock value will go up or down as it plays an active role in the financial gain of nation's economic status. We consider Jakarta Stock Exchange Composite Index Stock Decision Process with Spearman Correlation where A is the set of discrete actions of Jakarta Stock Exchange Composite 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(Spearman Correlation)5,6,7= $\begin{array}{cccc}{p}_{a1}& {p}_{a2}& \dots & {p}_{1n}\\ & ⋮\\ {p}_{j1}& {p}_{j2}& \dots & {p}_{jn}\\ & ⋮\\ {p}_{k1}& {p}_{k2}& \dots & {p}_{kn}\\ & ⋮\\ {p}_{n1}& {p}_{n2}& \dots & {p}_{nn}\end{array}$ X R(Modular Neural Network (Social Media Sentiment Analysis)) X S(n):→ (n+16 weeks) $\stackrel{\to }{R}=\left({r}_{1},{r}_{2},{r}_{3}\right)$

n:Time series to forecast

p:Price signals of Jakarta Stock Exchange Composite 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?

## Jakarta Stock Exchange Composite Index Stock Forecast (Buy or Sell) for (n+16 weeks)

Sample Set: Neural Network
Stock/Index: Jakarta Stock Exchange Composite Index Jakarta Stock Exchange Composite Index
Time series to forecast n: 16 Sep 2022 for (n+16 weeks)

According to price forecasts for (n+16 weeks) period: The dominant strategy among neural network is to Hold Jakarta Stock Exchange Composite 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

Jakarta Stock Exchange Composite Index assigned short-term B2 & long-term B1 forecasted stock rating. We evaluate the prediction models Modular Neural Network (Social Media Sentiment Analysis) with Spearman Correlation1,2,3,4 and conclude that the Jakarta Stock Exchange Composite Index stock is predictable in the short/long term. According to price forecasts for (n+16 weeks) period: The dominant strategy among neural network is to Hold Jakarta Stock Exchange Composite Index stock.

### Financial State Forecast for Jakarta Stock Exchange Composite Index Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B2B1
Operational Risk 3342
Market Risk3773
Technical Analysis4554
Fundamental Analysis8787
Risk Unsystematic8136

### Prediction Confidence Score

Trust metric by Neural Network: 89 out of 100 with 730 signals.

## References

1. 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.
2. Athey S, Imbens GW. 2017a. The econometrics of randomized experiments. In Handbook of Economic Field Experiments, Vol. 1, ed. E Duflo, A Banerjee, pp. 73–140. Amsterdam: Elsevier
3. E. Altman. Constrained Markov decision processes, volume 7. CRC Press, 1999
4. S. Devlin, L. Yliniemi, D. Kudenko, and K. Tumer. Potential-based difference rewards for multiagent reinforcement learning. In Proceedings of the Thirteenth International Joint Conference on Autonomous Agents and Multiagent Systems, May 2014
5. Breiman L. 2001a. Random forests. Mach. Learn. 45:5–32
6. J. Baxter and P. Bartlett. Infinite-horizon policy-gradient estimation. Journal of Artificial Intelligence Re- search, 15:319–350, 2001.
7. Harris ZS. 1954. Distributional structure. Word 10:146–62
Frequently Asked QuestionsQ: What is the prediction methodology for Jakarta Stock Exchange Composite Index stock?
A: Jakarta Stock Exchange Composite Index stock prediction methodology: We evaluate the prediction models Modular Neural Network (Social Media Sentiment Analysis) and Spearman Correlation
Q: Is Jakarta Stock Exchange Composite Index stock a buy or sell?
A: The dominant strategy among neural network is to Hold Jakarta Stock Exchange Composite Index Stock.
Q: Is Jakarta Stock Exchange Composite Index stock a good investment?
A: The consensus rating for Jakarta Stock Exchange Composite Index is Hold and assigned short-term B2 & long-term B1 forecasted stock rating.
Q: What is the consensus rating of Jakarta Stock Exchange Composite Index stock?
A: The consensus rating for Jakarta Stock Exchange Composite Index is Hold.
Q: What is the prediction period for Jakarta Stock Exchange Composite Index stock?
A: The prediction period for Jakarta Stock Exchange Composite Index is (n+16 weeks)