Can neural networks predict stock market? (STLD Stock Forecast)

Understanding the pattern of financial activities and predicting their development and changes are research hotspots in academic and financial circles. Because financial data contain complex, incomplete and fuzzy information, predicting their development trends is an extremely difficult challenge. Fluctuations in financial data depend on a myriad of correlated constantly changing factors. Therefore, predicting and analysing financial data are a nonlinear, time-dependent problem. Deep neural networks (DNNs) combine the advantages of deep learning (DL) and neural networks and can be used to solve nonlinear problems more satisfactorily compared to conventional machine learning algorithms. We evaluate Steel Dynamics prediction models with Modular Neural Network (Speculative Sentiment Analysis) and Paired T-Test1,2,3,4 and conclude that the STLD 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 Hold STLD stock.


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

Key Points

  1. Probability Distribution
  2. Which neural network is best for prediction?
  3. Can statistics predict the future?

STLD Target Price Prediction Modeling Methodology

Stock market or Share market is one of the most complicated and sophisticated way to do business. Small ownerships, brokerage corporations, banking sector, all depend on this very body to make revenue and divide risks; a very complicated model. However, this paper proposes to use machine learning algorithm to predict the future stock price for exchange by using open source libraries and preexisting algorithms to help make this unpredictable format of business a little more predictable. We consider Steel Dynamics Stock Decision Process with Paired T-Test where A is the set of discrete actions of STLD 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(Paired T-Test)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 (Speculative Sentiment Analysis)) X S(n):→ (n+3 month) r s rs

n:Time series to forecast

p:Price signals of STLD 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?

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

Sample Set: Neural Network
Stock/Index: STLD Steel Dynamics
Time series to forecast n: 12 Oct 2022 for (n+3 month)

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

Steel Dynamics assigned short-term Ba3 & long-term B3 forecasted stock rating. We evaluate the prediction models Modular Neural Network (Speculative Sentiment Analysis) with Paired T-Test1,2,3,4 and conclude that the STLD 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 Hold STLD stock.

Financial State Forecast for STLD Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*Ba3B3
Operational Risk 8334
Market Risk4074
Technical Analysis8030
Fundamental Analysis6956
Risk Unsystematic5145

Prediction Confidence Score

Trust metric by Neural Network: 73 out of 100 with 664 signals.

References

  1. Ashley, R. (1988), "On the relative worth of recent macroeconomic forecasts," International Journal of Forecasting, 4, 363–376.
  2. Greene WH. 2000. Econometric Analysis. Upper Saddle River, N J: Prentice Hall. 4th ed.
  3. Athey S, Mobius MM, Pál J. 2017c. The impact of aggregators on internet news consumption. Unpublished manuscript, Grad. School Bus., Stanford Univ., Stanford, CA
  4. D. Bertsekas. Dynamic programming and optimal control. Athena Scientific, 1995.
  5. Abadie A, Diamond A, Hainmueller J. 2015. Comparative politics and the synthetic control method. Am. J. Political Sci. 59:495–510
  6. C. Wu and Y. Lin. Minimizing risk models in Markov decision processes with policies depending on target values. Journal of Mathematical Analysis and Applications, 231(1):47–67, 1999
  7. H. Khalil and J. Grizzle. Nonlinear systems, volume 3. Prentice hall Upper Saddle River, 2002.
Frequently Asked QuestionsQ: What is the prediction methodology for STLD stock?
A: STLD stock prediction methodology: We evaluate the prediction models Modular Neural Network (Speculative Sentiment Analysis) and Paired T-Test
Q: Is STLD stock a buy or sell?
A: The dominant strategy among neural network is to Hold STLD Stock.
Q: Is Steel Dynamics stock a good investment?
A: The consensus rating for Steel Dynamics is Hold and assigned short-term Ba3 & long-term B3 forecasted stock rating.
Q: What is the consensus rating of STLD stock?
A: The consensus rating for STLD is Hold.
Q: What is the prediction period for STLD stock?
A: The prediction period for STLD is (n+3 month)

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