Is PSX Stock Expected to Go Up? (Stock Forecast)

The nature of stock market movement has always been ambiguous for investors because of various influential factors. This study aims to significantly reduce the risk of trend prediction with machine learning and deep learning algorithms. We evaluate Phillips 66 prediction models with Modular Neural Network (Financial Sentiment Analysis) and ElasticNet Regression^1,2,3,4 and conclude that the PSX stock is predictable in the short/long term. According to price forecasts for (n+6 month) period: The dominant strategy among neural network is to Hold PSX stock.

Keywords: PSX, Phillips 66, stock forecast, machine learning based prediction, risk rating, buy-sell behaviour, stock analysis, target price analysis, options and futures.

Key Points

1. Reaction Function
2. How do you know when a stock will go up or down?
3. Can machine learning predict?

PSX Target Price Prediction Modeling Methodology

Recently, there has been a surge of interest in the use of machine learning to help aid in the accurate predictions of financial markets. Despite the exciting advances in this cross-section of finance and AI, many of the current approaches are limited to using technical analysis to capture historical trends of each stock price and thus limited to certain experimental setups to obtain good prediction results. On the other hand, professional investors additionally use their rich knowledge of inter-market and inter-company relations to map the connectivity of companies and events, and use this map to make better market predictions. For instance, they would predict the movement of a certain company's stock price based not only on its former stock price trends but also on the performance of its suppliers or customers, the overall industry, macroeconomic factors and trade policies. This paper investigates the effectiveness of work at the intersection of market predictions and graph neural networks, which hold the potential to mimic the ways in which investors make decisions by incorporating company knowledge graphs directly into the predictive model. We consider Phillips 66 Stock Decision Process with ElasticNet Regression where A is the set of discrete actions of PSX 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= $\begin{array}{cccc}{p}_{\mathrm{a}1}& p_{\mathrm{a}2}& \dots & p_{1n}\\ & ⋮\\ p_{j1}& p_{j2}& \dots & p_{jn}\\ & ⋮\\ p_{k1}& p_{k2}& \dots & p_{kn}\\ & ⋮\\ p_{n1}& p_{n2}& \dots & p_{nn}\end{array}$ X R(Modular Neural Network (Financial Sentiment Analysis)) X S(n):→ (n+6 month) $\sum _{i=1}^n\left(a_i\right)$

n:Time series to forecast

p:Price signals of PSX 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?

PSX Stock Forecast (Buy or Sell) for (n+6 month)

Sample Set: Neural Network
Stock/Index: PSX Phillips 66
Time series to forecast n: 18 Sep 2022 for (n+6 month)

According to price forecasts for (n+6 month) period: The dominant strategy among neural network is to Hold PSX 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

Phillips 66 assigned short-term Ba3 & long-term B2 forecasted stock rating. We evaluate the prediction models Modular Neural Network (Financial Sentiment Analysis) with ElasticNet Regression^1,2,3,4 and conclude that the PSX stock is predictable in the short/long term. According to price forecasts for (n+6 month) period: The dominant strategy among neural network is to Hold PSX stock.

Financial State Forecast for PSX Stock Options & Futures

Rating	Short-Term	Long-Term Senior
Outlook*	Ba3	B2
Operational Risk	50	78
Market Risk	85	31
Technical Analysis	76	71
Fundamental Analysis	33	43
Risk Unsystematic	82	47

Prediction Confidence Score

Trust metric by Neural Network: 75 out of 100 with 777 signals.

References

1. Wu X, Kumar V, Quinlan JR, Ghosh J, Yang Q, et al. 2008. Top 10 algorithms in data mining. Knowl. Inform. Syst. 14:1–37
2. Harris ZS. 1954. Distributional structure. Word 10:146–62
3. Rumelhart DE, Hinton GE, Williams RJ. 1986. Learning representations by back-propagating errors. Nature 323:533–36
4. Andrews, D. W. K. W. Ploberger (1994), "Optimal tests when a nuisance parameter is present only under the alternative," Econometrica, 62, 1383–1414.
5. Chernozhukov V, Chetverikov D, Demirer M, Duflo E, Hansen C, et al. 2018a. Double/debiased machine learning for treatment and structural parameters. Econom. J. 21:C1–68
6. R. Sutton and A. Barto. Reinforcement Learning. The MIT Press, 1998
7. Bessler, D. A. T. Covey (1991), "Cointegration: Some results on U.S. cattle prices," Journal of Futures Markets, 11, 461–474.

Frequently Asked Questions

Q: What is the prediction methodology for PSX stock?
A: PSX stock prediction methodology: We evaluate the prediction models Modular Neural Network (Financial Sentiment Analysis) and ElasticNet Regression
Q: Is PSX stock a buy or sell?
A: The dominant strategy among neural network is to Hold PSX Stock.
Q: Is Phillips 66 stock a good investment?
A: The consensus rating for Phillips 66 is Hold and assigned short-term Ba3 & long-term B2 forecasted stock rating.
Q: What is the consensus rating of PSX stock?
A: The consensus rating for PSX is Hold.
Q: What is the prediction period for PSX stock?
A: The prediction period for PSX is (n+6 month)

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