Should You Buy Now or Wait? KOSPI Index Stock Forecast


Abstract

We evaluate KOSPI Index prediction models with Modular Neural Network (DNN Layer) and Multiple Regression1,2,3,4 and conclude that the KOSPI 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 KOSPI Index stock.


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

Key Points

  1. Market Risk
  2. What is Markov decision process in reinforcement learning?
  3. Short/Long Term Stocks

KOSPI Index Target Price Prediction Modeling Methodology

We consider KOSPI Index Stock Decision Process with Multiple Regression where A is the set of discrete actions of KOSPI 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(Multiple 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 (DNN Layer)) X S(n):→ (n+16 weeks) R = 1 0 0 0 1 0 0 0 1

n:Time series to forecast

p:Price signals of KOSPI 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?

KOSPI Index Stock Forecast (Buy or Sell) for (n+16 weeks)

Sample Set: Neural Network
Stock/Index: KOSPI Index KOSPI Index
Time series to forecast n: 02 Sep 2022 for (n+16 weeks)

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

KOSPI Index assigned short-term B1 & long-term Baa2 forecasted stock rating. We evaluate the prediction models Modular Neural Network (DNN Layer) with Multiple Regression1,2,3,4 and conclude that the KOSPI 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 KOSPI Index stock.

Financial State Forecast for KOSPI Index Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B1Baa2
Operational Risk 8756
Market Risk6180
Technical Analysis4673
Fundamental Analysis3982
Risk Unsystematic7771

Prediction Confidence Score

Trust metric by Neural Network: 86 out of 100 with 676 signals.

References

  1. LeCun Y, Bengio Y, Hinton G. 2015. Deep learning. Nature 521:436–44
  2. Bertsimas D, King A, Mazumder R. 2016. Best subset selection via a modern optimization lens. Ann. Stat. 44:813–52
  3. Ashley, R. (1983), "On the usefulness of macroeconomic forecasts as inputs to forecasting models," Journal of Forecasting, 2, 211–223.
  4. Firth JR. 1957. A synopsis of linguistic theory 1930–1955. In Studies in Linguistic Analysis (Special Volume of the Philological Society), ed. JR Firth, pp. 1–32. Oxford, UK: Blackwell
  5. Dudik M, Erhan D, Langford J, Li L. 2014. Doubly robust policy evaluation and optimization. Stat. Sci. 29:485–511
  6. Zou H, Hastie T. 2005. Regularization and variable selection via the elastic net. J. R. Stat. Soc. B 67:301–20
  7. Hastie T, Tibshirani R, Wainwright M. 2015. Statistical Learning with Sparsity: The Lasso and Generalizations. New York: CRC Press
Frequently Asked QuestionsQ: What is the prediction methodology for KOSPI Index stock?
A: KOSPI Index stock prediction methodology: We evaluate the prediction models Modular Neural Network (DNN Layer) and Multiple Regression
Q: Is KOSPI Index stock a buy or sell?
A: The dominant strategy among neural network is to Hold KOSPI Index Stock.
Q: Is KOSPI Index stock a good investment?
A: The consensus rating for KOSPI Index is Hold and assigned short-term B1 & long-term Baa2 forecasted stock rating.
Q: What is the consensus rating of KOSPI Index stock?
A: The consensus rating for KOSPI Index is Hold.
Q: What is the prediction period for KOSPI Index stock?
A: The prediction period for KOSPI Index is (n+16 weeks)

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