Should You Buy, Sell, or Hold? (FBHS Stock Forecast)


This paper tries to address the problem of stock market prediction leveraging artificial intelligence (AI) strategies. The stock market prediction can be modeled based on two principal analyses called technical and fundamental. In the technical analysis approach, the regression machine learning (ML) algorithms are employed to predict the stock price trend at the end of a business day based on the historical price data. In contrast, in the fundamental analysis, the classification ML algorithms are applied to classify the public sentiment based on news and social media. We evaluate Fortune Brands prediction models with Deductive Inference (ML) and Spearman Correlation1,2,3,4 and conclude that the FBHS 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 Sell FBHS stock.


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

Key Points

  1. Market Outlook
  2. Trust metric by Neural Network
  3. Nash Equilibria

FBHS Target Price Prediction Modeling Methodology

The classical linear multi-factor stock selection model is widely used for long-term stock price trend prediction. However, the stock market is chaotic, complex, and dynamic, for which reasons the linear model assumption may be unreasonable, and it is more meaningful to construct a better-integrated stock selection model based on different feature selection and nonlinear stock price trend prediction methods. We consider Fortune Brands Stock Decision Process with Spearman Correlation where A is the set of discrete actions of FBHS 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= 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(Deductive Inference (ML)) X S(n):→ (n+8 weeks) r s rs

n:Time series to forecast

p:Price signals of FBHS stock

j:Nash equilibria

k:Dominated move

a:Best response for target price

 

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How do AC Investment Research machine learning (predictive) algorithms actually work?

FBHS Stock Forecast (Buy or Sell) for (n+8 weeks)

Sample Set: Neural Network
Stock/Index: FBHS Fortune Brands
Time series to forecast n: 09 Sep 2022 for (n+8 weeks)

According to price forecasts for (n+8 weeks) period: The dominant strategy among neural network is to Sell FBHS 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

Fortune Brands assigned short-term B3 & long-term B2 forecasted stock rating. We evaluate the prediction models Deductive Inference (ML) with Spearman Correlation1,2,3,4 and conclude that the FBHS 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 Sell FBHS stock.

Financial State Forecast for FBHS Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B3B2
Operational Risk 6351
Market Risk5783
Technical Analysis3155
Fundamental Analysis6137
Risk Unsystematic3648

Prediction Confidence Score

Trust metric by Neural Network: 82 out of 100 with 467 signals.

References

  1. Y. Le Tallec. Robust, risk-sensitive, and data-driven control of Markov decision processes. PhD thesis, Massachusetts Institute of Technology, 2007.
  2. Imbens GW, Rubin DB. 2015. Causal Inference in Statistics, Social, and Biomedical Sciences. Cambridge, UK: Cambridge Univ. Press
  3. Batchelor, R. P. Dua (1993), "Survey vs ARCH measures of inflation uncertainty," Oxford Bulletin of Economics Statistics, 55, 341–353.
  4. Dudik M, Langford J, Li L. 2011. Doubly robust policy evaluation and learning. In Proceedings of the 28th International Conference on Machine Learning, pp. 1097–104. La Jolla, CA: Int. Mach. Learn. Soc.
  5. Barrett, C. B. (1997), "Heteroscedastic price forecasting for food security management in developing countries," Oxford Development Studies, 25, 225–236.
  6. 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.
  7. Bottomley, P. R. Fildes (1998), "The role of prices in models of innovation diffusion," Journal of Forecasting, 17, 539–555.
Frequently Asked QuestionsQ: What is the prediction methodology for FBHS stock?
A: FBHS stock prediction methodology: We evaluate the prediction models Deductive Inference (ML) and Spearman Correlation
Q: Is FBHS stock a buy or sell?
A: The dominant strategy among neural network is to Sell FBHS Stock.
Q: Is Fortune Brands stock a good investment?
A: The consensus rating for Fortune Brands is Sell and assigned short-term B3 & long-term B2 forecasted stock rating.
Q: What is the consensus rating of FBHS stock?
A: The consensus rating for FBHS is Sell.
Q: What is the prediction period for FBHS stock?
A: The prediction period for FBHS is (n+8 weeks)

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