Modelling A.I. in Economics

Can stock prices be predicted? (RUN Stock Forecast) (Forecast)

Prediction of stock market is a long-time attractive topic to researchers from different fields. In particular, numerous studies have been conducted to predict the movement of stock market using machine learning algorithms such as support vector machine (SVM) and reinforcement learning. In this project, we propose a new prediction algorithm that exploits the temporal correlation among global stock markets and various financial products to predict the next-day stock trend. We evaluate Sunrun prediction models with Active Learning (ML) and Stepwise Regression1,2,3,4 and conclude that the RUN stock is predictable in the short/long term. According to price forecasts for (n+6 month) period: The dominant strategy among neural network is to Sell RUN stock.


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

Key Points

  1. Decision Making
  2. What are main components of Markov decision process?
  3. What is statistical models in machine learning?

RUN Target Price Prediction Modeling Methodology

Stock market prediction is the act of trying to determine the future value of a company stock or other financial instrument traded on a financial exchange. The successful prediction of a stock's future price will maximize investor's gains. This paper proposes a machine learning model to predict stock market price. We consider Sunrun Stock Decision Process with Stepwise Regression where A is the set of discrete actions of RUN 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(Stepwise 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(Active Learning (ML)) X S(n):→ (n+6 month) i = 1 n r i

n:Time series to forecast

p:Price signals of RUN 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?

RUN Stock Forecast (Buy or Sell) for (n+6 month)

Sample Set: Neural Network
Stock/Index: RUN Sunrun
Time series to forecast n: 23 Oct 2022 for (n+6 month)

According to price forecasts for (n+6 month) period: The dominant strategy among neural network is to Sell RUN 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

Sunrun assigned short-term B2 & long-term Ba3 forecasted stock rating. We evaluate the prediction models Active Learning (ML) with Stepwise Regression1,2,3,4 and conclude that the RUN stock is predictable in the short/long term. According to price forecasts for (n+6 month) period: The dominant strategy among neural network is to Sell RUN stock.

Financial State Forecast for RUN Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B2Ba3
Operational Risk 7744
Market Risk4668
Technical Analysis4765
Fundamental Analysis5878
Risk Unsystematic3960

Prediction Confidence Score

Trust metric by Neural Network: 73 out of 100 with 669 signals.

References

  1. J. Filar, L. Kallenberg, and H. Lee. Variance-penalized Markov decision processes. Mathematics of Opera- tions Research, 14(1):147–161, 1989
  2. Tibshirani R. 1996. Regression shrinkage and selection via the lasso. J. R. Stat. Soc. B 58:267–88
  3. R. Sutton, D. McAllester, S. Singh, and Y. Mansour. Policy gradient methods for reinforcement learning with function approximation. In Proceedings of Advances in Neural Information Processing Systems 12, pages 1057–1063, 2000
  4. V. Borkar. Stochastic approximation: a dynamical systems viewpoint. Cambridge University Press, 2008
  5. Chen X. 2007. Large sample sieve estimation of semi-nonparametric models. In Handbook of Econometrics, Vol. 6B, ed. JJ Heckman, EE Learner, pp. 5549–632. Amsterdam: Elsevier
  6. Abadie A, Imbens GW. 2011. Bias-corrected matching estimators for average treatment effects. J. Bus. Econ. Stat. 29:1–11
  7. Keane MP. 2013. Panel data discrete choice models of consumer demand. In The Oxford Handbook of Panel Data, ed. BH Baltagi, pp. 54–102. Oxford, UK: Oxford Univ. Press
Frequently Asked QuestionsQ: What is the prediction methodology for RUN stock?
A: RUN stock prediction methodology: We evaluate the prediction models Active Learning (ML) and Stepwise Regression
Q: Is RUN stock a buy or sell?
A: The dominant strategy among neural network is to Sell RUN Stock.
Q: Is Sunrun stock a good investment?
A: The consensus rating for Sunrun is Sell and assigned short-term B2 & long-term Ba3 forecasted stock rating.
Q: What is the consensus rating of RUN stock?
A: The consensus rating for RUN is Sell.
Q: What is the prediction period for RUN stock?
A: The prediction period for RUN is (n+6 month)

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