Modelling A.I. in Economics

Can we predict stock market using machine learning? (PSI Index Stock Forecast) (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 PSI Index prediction models with Transductive Learning (ML) and Sign Test1,2,3,4 and conclude that the PSI Index 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 PSI Index stock.


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

Key Points

  1. How useful are statistical predictions?
  2. What is Markov decision process in reinforcement learning?
  3. Probability Distribution

PSI Index Target Price Prediction Modeling Methodology

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 consider PSI Index Stock Decision Process with Sign Test where A is the set of discrete actions of PSI Index 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(Sign 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(Transductive Learning (ML)) X S(n):→ (n+8 weeks) S = s 1 s 2 s 3

n:Time series to forecast

p:Price signals of PSI Index 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?

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

Sample Set: Neural Network
Stock/Index: PSI Index PSI Index
Time series to forecast n: 19 Oct 2022 for (n+8 weeks)

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

PSI Index assigned short-term Baa2 & long-term Ba2 forecasted stock rating. We evaluate the prediction models Transductive Learning (ML) with Sign Test1,2,3,4 and conclude that the PSI Index 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 PSI Index stock.

Financial State Forecast for PSI Index Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*Baa2Ba2
Operational Risk 8478
Market Risk6157
Technical Analysis8987
Fundamental Analysis8884
Risk Unsystematic7739

Prediction Confidence Score

Trust metric by Neural Network: 85 out of 100 with 838 signals.

References

  1. Tibshirani R, Hastie T. 1987. Local likelihood estimation. J. Am. Stat. Assoc. 82:559–67
  2. Holland PW. 1986. Statistics and causal inference. J. Am. Stat. Assoc. 81:945–60
  3. Angrist JD, Pischke JS. 2008. Mostly Harmless Econometrics: An Empiricist's Companion. Princeton, NJ: Princeton Univ. Press
  4. Clements, M. P. D. F. Hendry (1995), "Forecasting in cointegrated systems," Journal of Applied Econometrics, 10, 127–146.
  5. Pennington J, Socher R, Manning CD. 2014. GloVe: global vectors for word representation. In Proceedings of the 2014 Conference on Empirical Methods on Natural Language Processing, pp. 1532–43. New York: Assoc. Comput. Linguist.
  6. K. Tumer and D. Wolpert. A survey of collectives. In K. Tumer and D. Wolpert, editors, Collectives and the Design of Complex Systems, pages 1–42. Springer, 2004.
  7. 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.
Frequently Asked QuestionsQ: What is the prediction methodology for PSI Index stock?
A: PSI Index stock prediction methodology: We evaluate the prediction models Transductive Learning (ML) and Sign Test
Q: Is PSI Index stock a buy or sell?
A: The dominant strategy among neural network is to Sell PSI Index Stock.
Q: Is PSI Index stock a good investment?
A: The consensus rating for PSI Index is Sell and assigned short-term Baa2 & long-term Ba2 forecasted stock rating.
Q: What is the consensus rating of PSI Index stock?
A: The consensus rating for PSI Index is Sell.
Q: What is the prediction period for PSI Index stock?
A: The prediction period for PSI Index is (n+8 weeks)

Premium

  • Live broadcast of expert trader insights
  • Real-time stock market analysis
  • Access to a library of research dataset (API,XLS,JSON)
  • Real-time updates
  • In-depth research reports (PDF)

Login
This project is licensed under the license; additional terms may apply.