## Abstract

**We evaluate Caterpillar prediction models with Modular Neural Network (Financial Sentiment Analysis) and Polynomial Regression ^{1,2,3,4} and conclude that the CAT stock is predictable in the short/long term. **

**According to price forecasts for (n+4 weeks) period: The dominant strategy among neural network is to Wait until speculative trend diminishes CAT stock.**

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

*Keywords:*## Key Points

- Understanding Buy, Sell, and Hold Ratings
- Market Outlook
- Can statistics predict the future?

## CAT Target Price Prediction Modeling Methodology

We consider Caterpillar Stock Decision Process with Polynomial Regression where A is the set of discrete actions of CAT 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(Polynomial 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(Modular Neural Network (Financial Sentiment Analysis)) X S(n):→ (n+4 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 CAT 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?

## CAT Stock Forecast (Buy or Sell) for (n+4 weeks)

**Sample Set:**Neural Network

**Stock/Index:**CAT Caterpillar

**Time series to forecast n: 05 Sep 2022**for (n+4 weeks)

**According to price forecasts for (n+4 weeks) period: The dominant strategy among neural network is to Wait until speculative trend diminishes CAT 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

Caterpillar assigned short-term Ba3 & long-term B2 forecasted stock rating.** We evaluate the prediction models Modular Neural Network (Financial Sentiment Analysis) with Polynomial Regression ^{1,2,3,4} and conclude that the CAT stock is predictable in the short/long term.**

**According to price forecasts for (n+4 weeks) period: The dominant strategy among neural network is to Wait until speculative trend diminishes CAT stock.**

### Financial State Forecast for CAT Stock Options & Futures

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

Outlook* | Ba3 | B2 |

Operational Risk | 77 | 36 |

Market Risk | 62 | 48 |

Technical Analysis | 89 | 37 |

Fundamental Analysis | 57 | 35 |

Risk Unsystematic | 49 | 90 |

### Prediction Confidence Score

## References

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- G. Konidaris, S. Osentoski, and P. Thomas. Value function approximation in reinforcement learning using the Fourier basis. In AAAI, 2011
- J. Harb and D. Precup. Investigating recurrence and eligibility traces in deep Q-networks. In Deep Reinforcement Learning Workshop, NIPS 2016, Barcelona, Spain, 2016.
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- Doudchenko N, Imbens GW. 2016. Balancing, regression, difference-in-differences and synthetic control methods: a synthesis. NBER Work. Pap. 22791
- Breiman L, Friedman J, Stone CJ, Olshen RA. 1984. Classification and Regression Trees. Boca Raton, FL: CRC Press

## Frequently Asked Questions

Q: What is the prediction methodology for CAT stock?A: CAT stock prediction methodology: We evaluate the prediction models Modular Neural Network (Financial Sentiment Analysis) and Polynomial Regression

Q: Is CAT stock a buy or sell?

A: The dominant strategy among neural network is to Wait until speculative trend diminishes CAT Stock.

Q: Is Caterpillar stock a good investment?

A: The consensus rating for Caterpillar is Wait until speculative trend diminishes and assigned short-term Ba3 & long-term B2 forecasted stock rating.

Q: What is the consensus rating of CAT stock?

A: The consensus rating for CAT is Wait until speculative trend diminishes.

Q: What is the prediction period for CAT stock?

A: The prediction period for CAT is (n+4 weeks)

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