Can we predict stock market using machine learning? (LON:LAND Stock Forecast)

In this paper we investigate ways to use prior knowledge and neural networks to improve multivariate prediction ability. Daily stock prices are predicted as a complicated real-world problem, taking non-numerical factors such as political and international events are into account. We have studied types of prior knowledge which are difficult to insert into initial network structures or to represent in the form of error measurements. We evaluate LAND SECURITIES GROUP PLC prediction models with Modular Neural Network (Financial Sentiment Analysis) and Sign Test^1,2,3,4 and conclude that the LON:LAND 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 Hold LON:LAND stock.

Keywords: LON:LAND, LAND SECURITIES GROUP PLC, stock forecast, machine learning based prediction, risk rating, buy-sell behaviour, stock analysis, target price analysis, options and futures.

Key Points

1. What is prediction in deep learning?
2. Nash Equilibria
3. Market Signals

LON:LAND Target Price Prediction Modeling Methodology

In this paper a Bayesian regularized artificial neural network is proposed as a novel method to forecast financial market behavior. Daily market prices and financial technical indicators are utilized as inputs to predict the one day future closing price of individual stocks. The prediction of stock price movement is generally considered to be a challenging and important task for financial time series analysis. We consider LAND SECURITIES GROUP PLC Stock Decision Process with Sign Test where A is the set of discrete actions of LON:LAND 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= $\begin{array}{cccc}{p}_{\mathrm{a}1}& p_{\mathrm{a}2}& \dots & p_{1n}\\ & ⋮\\ p_{j1}& p_{j2}& \dots & p_{jn}\\ & ⋮\\ p_{k1}& p_{k2}& \dots & p_{kn}\\ & ⋮\\ p_{n1}& p_{n2}& \dots & p_{nn}\end{array}$ X R(Modular Neural Network (Financial Sentiment Analysis)) X S(n):→ (n+4 weeks) $\begin{array}{l}\int e^x\mathrm{rx}\end{array}$

n:Time series to forecast

p:Price signals of LON:LAND 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?

LON:LAND Stock Forecast (Buy or Sell) for (n+4 weeks)

Sample Set: Neural Network
Stock/Index: LON:LAND LAND SECURITIES GROUP PLC
Time series to forecast n: 30 Oct 2022 for (n+4 weeks)

According to price forecasts for (n+4 weeks) period: The dominant strategy among neural network is to Hold LON:LAND 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 LAND SECURITIES GROUP PLC

1. There are two types of components of nominal amounts that can be designated as the hedged item in a hedging relationship: a component that is a proportion of an entire item or a layer component. The type of component changes the accounting outcome. An entity shall designate the component for accounting purposes consistently with its risk management objective.
2. Lifetime expected credit losses are not recognised on a financial instrument simply because it was considered to have low credit risk in the previous reporting period and is not considered to have low credit risk at the reporting date. In such a case, an entity shall determine whether there has been a significant increase in credit risk since initial recognition and thus whether lifetime expected credit losses are required to be recognised in accordance with paragraph 5.5.3.
3. A hedge of a firm commitment (for example, a hedge of the change in fuel price relating to an unrecognised contractual commitment by an electric utility to purchase fuel at a fixed price) is a hedge of an exposure to a change in fair value. Accordingly, such a hedge is a fair value hedge. However, in accordance with paragraph 6.5.4, a hedge of the foreign currency risk of a firm commitment could alternatively be accounted for as a cash flow hedge.
4. 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.

*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

LAND SECURITIES GROUP PLC assigned short-term Ba1 & long-term B3 forecasted stock rating. We evaluate the prediction models Modular Neural Network (Financial Sentiment Analysis) with Sign Test^1,2,3,4 and conclude that the LON:LAND 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 Hold LON:LAND stock.

Financial State Forecast for LON:LAND LAND SECURITIES GROUP PLC Stock Options & Futures

Rating	Short-Term	Long-Term Senior
Outlook*	Ba1	B3
Operational Risk	88	41
Market Risk	82	55
Technical Analysis	88	69
Fundamental Analysis	60	44
Risk Unsystematic	32	31

Prediction Confidence Score

Trust metric by Neural Network: 89 out of 100 with 563 signals.

References

1. Hornik K, Stinchcombe M, White H. 1989. Multilayer feedforward networks are universal approximators. Neural Netw. 2:359–66
2. Cheung, Y. M.D. Chinn (1997), "Further investigation of the uncertain unit root in GNP," Journal of Business and Economic Statistics, 15, 68–73.
3. D. White. Mean, variance, and probabilistic criteria in finite Markov decision processes: A review. Journal of Optimization Theory and Applications, 56(1):1–29, 1988.
4. M. Sobel. The variance of discounted Markov decision processes. Applied Probability, pages 794–802, 1982
5. Mnih A, Hinton GE. 2007. Three new graphical models for statistical language modelling. In International Conference on Machine Learning, pp. 641–48. La Jolla, CA: Int. Mach. Learn. Soc.
6. Athey S, Imbens G, Wager S. 2016a. Efficient inference of average treatment effects in high dimensions via approximate residual balancing. arXiv:1604.07125 [math.ST]
7. Athey S, Mobius MM, Pál J. 2017c. The impact of aggregators on internet news consumption. Unpublished manuscript, Grad. School Bus., Stanford Univ., Stanford, CA

Frequently Asked Questions

Q: What is the prediction methodology for LON:LAND stock?
A: LON:LAND stock prediction methodology: We evaluate the prediction models Modular Neural Network (Financial Sentiment Analysis) and Sign Test
Q: Is LON:LAND stock a buy or sell?
A: The dominant strategy among neural network is to Hold LON:LAND Stock.
Q: Is LAND SECURITIES GROUP PLC stock a good investment?
A: The consensus rating for LAND SECURITIES GROUP PLC is Hold and assigned short-term Ba1 & long-term B3 forecasted stock rating.
Q: What is the consensus rating of LON:LAND stock?
A: The consensus rating for LON:LAND is Hold.
Q: What is the prediction period for LON:LAND stock?
A: The prediction period for LON:LAND is (n+4 weeks)

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