Modelling A.I. in Economics

Buy or Sell: HIK Stock (Forecast)

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 evaluate Hikma Pharmaceuticals prediction models with Modular Neural Network (Financial Sentiment Analysis) and Polynomial Regression1,2,3,4 and conclude that the HIK stock is predictable in the short/long term. According to price forecasts for (n+3 month) period: The dominant strategy among neural network is to Sell HIK stock.


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

Key Points

  1. Stock Forecast Based On a Predictive Algorithm
  2. Short/Long Term Stocks
  3. Trading Signals

HIK Target Price Prediction Modeling Methodology

Complex networks in stock market and stock price volatility pattern prediction are the important issues in stock price research. Previous studies have used historical information regarding a single stock to predict the future trend of the stock's price, seldom considering comovement among stocks in the same market. In this study, in order to extract the information about relation stocks for prediction, we try to combine the complex network method with machine learning to predict stock price patterns. We consider Hikma Pharmaceuticals Stock Decision Process with Polynomial Regression where A is the set of discrete actions of HIK 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= 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 (Financial Sentiment Analysis)) X S(n):→ (n+3 month) i = 1 n r i

n:Time series to forecast

p:Price signals of HIK 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?

HIK Stock Forecast (Buy or Sell) for (n+3 month)

Sample Set: Neural Network
Stock/Index: HIK Hikma Pharmaceuticals
Time series to forecast n: 28 Oct 2022 for (n+3 month)

According to price forecasts for (n+3 month) period: The dominant strategy among neural network is to Sell HIK 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%

Adjusted IFRS* Prediction Methods for Hikma Pharmaceuticals

  1. The assessment of whether an economic relationship exists includes an analysis of the possible behaviour of the hedging relationship during its term to ascertain whether it can be expected to meet the risk management objective. The mere existence of a statistical correlation between two variables does not, by itself, support a valid conclusion that an economic relationship exists.
  2. Annual Improvements to IFRSs 2010–2012 Cycle, issued in December 2013, amended paragraphs 4.2.1 and 5.7.5 as a consequential amendment derived from the amendment to IFRS 3. An entity shall apply that amendment prospectively to business combinations to which the amendment to IFRS 3 applies.
  3. If a put option obligation written by an entity or call option right held by an entity prevents a transferred asset from being derecognised and the entity measures the transferred asset at amortised cost, the associated liability is measured at its cost (ie the consideration received) adjusted for the amortisation of any difference between that cost and the gross carrying amount of the transferred asset at the expiration date of the option. For example, assume that the gross carrying amount of the asset on the date of the transfer is CU98 and that the consideration received is CU95. The gross carrying amount of the asset on the option exercise date will be CU100. The initial carrying amount of the associated liability is CU95 and the difference between CU95 and CU100 is recognised in profit or loss using the effective interest method. If the option is exercised, any difference between the carrying amount of the associated liability and the exercise price is recognised in profit or loss.
  4. However, depending on the nature of the financial instruments and the credit risk information available for particular groups of financial instruments, an entity may not be able to identify significant changes in credit risk for individual financial instruments before the financial instrument becomes past due. This may be the case for financial instruments such as retail loans for which there is little or no updated credit risk information that is routinely obtained and monitored on an individual instrument until a customer breaches the contractual terms. If changes in the credit risk for individual financial instruments are not captured before they become past due, a loss allowance based only on credit information at an individual financial instrument level would not faithfully represent the changes in credit risk since initial recognition.

*International Financial Reporting Standards (IFRS) are a set of accounting rules for the financial statements of public companies that are intended to make them consistent, transparent, and easily comparable around the world.

Conclusions

Hikma Pharmaceuticals assigned short-term Caa2 & long-term Ba3 forecasted stock rating. We evaluate the prediction models Modular Neural Network (Financial Sentiment Analysis) with Polynomial Regression1,2,3,4 and conclude that the HIK stock is predictable in the short/long term. According to price forecasts for (n+3 month) period: The dominant strategy among neural network is to Sell HIK stock.

Financial State Forecast for HIK Hikma Pharmaceuticals Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*Caa2Ba3
Operational Risk 3656
Market Risk3056
Technical Analysis7074
Fundamental Analysis3642
Risk Unsystematic5687

Prediction Confidence Score

Trust metric by Neural Network: 89 out of 100 with 470 signals.

References

  1. Hirano K, Porter JR. 2009. Asymptotics for statistical treatment rules. Econometrica 77:1683–701
  2. F. A. Oliehoek, M. T. J. Spaan, and N. A. Vlassis. Optimal and approximate q-value functions for decentralized pomdps. J. Artif. Intell. Res. (JAIR), 32:289–353, 2008
  3. Athey S, Imbens G. 2016. Recursive partitioning for heterogeneous causal effects. PNAS 113:7353–60
  4. Mnih A, Kavukcuoglu K. 2013. Learning word embeddings efficiently with noise-contrastive estimation. In Advances in Neural Information Processing Systems, Vol. 26, ed. Z Ghahramani, M Welling, C Cortes, ND Lawrence, KQ Weinberger, pp. 2265–73. San Diego, CA: Neural Inf. Process. Syst. Found.
  5. G. Theocharous and A. Hallak. Lifetime value marketing using reinforcement learning. RLDM 2013, page 19, 2013
  6. R. Rockafellar and S. Uryasev. Conditional value-at-risk for general loss distributions. Journal of Banking and Finance, 26(7):1443 – 1471, 2002
  7. Meinshausen N. 2007. Relaxed lasso. Comput. Stat. Data Anal. 52:374–93
Frequently Asked QuestionsQ: What is the prediction methodology for HIK stock?
A: HIK stock prediction methodology: We evaluate the prediction models Modular Neural Network (Financial Sentiment Analysis) and Polynomial Regression
Q: Is HIK stock a buy or sell?
A: The dominant strategy among neural network is to Sell HIK Stock.
Q: Is Hikma Pharmaceuticals stock a good investment?
A: The consensus rating for Hikma Pharmaceuticals is Sell and assigned short-term Caa2 & long-term Ba3 forecasted stock rating.
Q: What is the consensus rating of HIK stock?
A: The consensus rating for HIK is Sell.
Q: What is the prediction period for HIK stock?
A: The prediction period for HIK is (n+3 month)

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