Stock prediction with data mining techniques is one of the most important issues in finance being investigated by researchers across the globe. Data mining techniques can be used extensively in the financial markets to help investors make qualitative decision. One of the techniques is artificial neural network (ANN). However, in the application of ANN for predicting the financial market the use of technical analysis variables for stock prediction is predominant. In this paper, we present a hybridized approach which combines the use of the variables of technical and fundamental analysis of stock market indicators for prediction of future price of stock in order to improve on the existing approaches. ** We evaluate FTSE 100 Index prediction models with Transductive Learning (ML) and Lasso Regression ^{1,2,3,4} and conclude that the FTSE 100 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 FTSE 100 Index stock.**

**FTSE 100 Index, FTSE 100 Index, stock forecast, machine learning based prediction, risk rating, buy-sell behaviour, stock analysis, target price analysis, options and futures.**

*Keywords:*## Key Points

- Trading Interaction
- Can statistics predict the future?
- Reaction Function

## FTSE 100 Index Target Price Prediction Modeling Methodology

The categorization of high dimensional data present a fascinating challenge to machine learning models as frequent number of highly correlated dimensions or attributes can affect the accuracy of classification model. In this paper, the problem of high dimensionality of stock exchange is investigated to predict the market trends by applying the principal component analysis (PCA) with linear regression. PCA can help to improve the predictive performance of machine learning methods while reducing the redundancy among the data. We consider FTSE 100 Index Stock Decision Process with Lasso Regression where A is the set of discrete actions of FTSE 100 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(Lasso Regression)

^{5,6,7}= $\begin{array}{cccc}{p}_{\mathrm{a}1}& {p}_{\mathrm{a}2}& \dots & {p}_{1n}\\ & \vdots \\ {p}_{j1}& {p}_{j2}& \dots & {p}_{jn}\\ & \vdots \\ {p}_{k1}& {p}_{k2}& \dots & {p}_{kn}\\ & \vdots \\ {p}_{n1}& {p}_{n2}& \dots & {p}_{nn}\end{array}$ X R(Transductive Learning (ML)) X S(n):→ (n+8 weeks) $R=\left(\begin{array}{ccc}1& 0& 0\\ 0& 1& 0\\ 0& 0& 1\end{array}\right)$

n:Time series to forecast

p:Price signals of FTSE 100 Index stock

j:Nash equilibria

k:Dominated move

a:Best response for target price

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## FTSE 100 Index Stock Forecast (Buy or Sell) for (n+8 weeks)

**Sample Set:**Neural Network

**Stock/Index:**FTSE 100 Index FTSE 100 Index

**Time series to forecast n: 14 Sep 2022**for (n+8 weeks)

**According to price forecasts for (n+8 weeks) period: The dominant strategy among neural network is to Hold FTSE 100 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

FTSE 100 Index assigned short-term Ba3 & long-term Ba3 forecasted stock rating.** We evaluate the prediction models Transductive Learning (ML) with Lasso Regression ^{1,2,3,4} and conclude that the FTSE 100 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 FTSE 100 Index stock.**

### Financial State Forecast for FTSE 100 Index Stock Options & Futures

Rating | Short-Term | Long-Term Senior |
---|---|---|

Outlook* | Ba3 | Ba3 |

Operational Risk | 70 | 64 |

Market Risk | 41 | 44 |

Technical Analysis | 72 | 88 |

Fundamental Analysis | 54 | 55 |

Risk Unsystematic | 87 | 55 |

### Prediction Confidence Score

## References

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- Kallus N. 2017. Balanced policy evaluation and learning. arXiv:1705.07384 [stat.ML]
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## Frequently Asked Questions

Q: What is the prediction methodology for FTSE 100 Index stock?A: FTSE 100 Index stock prediction methodology: We evaluate the prediction models Transductive Learning (ML) and Lasso Regression

Q: Is FTSE 100 Index stock a buy or sell?

A: The dominant strategy among neural network is to Hold FTSE 100 Index Stock.

Q: Is FTSE 100 Index stock a good investment?

A: The consensus rating for FTSE 100 Index is Hold and assigned short-term Ba3 & long-term Ba3 forecasted stock rating.

Q: What is the consensus rating of FTSE 100 Index stock?

A: The consensus rating for FTSE 100 Index is Hold.

Q: What is the prediction period for FTSE 100 Index stock?

A: The prediction period for FTSE 100 Index is (n+8 weeks)

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