DIRECT LINE INSURANCE GROUP PLC assigned short-term Ba3 & long-term B2 forecasted stock rating.

Machine Learning refers to a concept in which a machine has been programmed to learn specific patterns from historical data using powerful algorithms and make predictions in future based on the patterns it learnt. Machine learning is a branch of Artificial Intelligence (AI), the term proposed in 1959 by Arthur Samuel who defined it as the ability of computers or machines to learn new rules and concepts from data without being explicitly programmed. We evaluate DIRECT LINE INSURANCE GROUP PLC prediction models with Modular Neural Network (News Feed Sentiment Analysis) and Multiple Regression^1,2,3,4 and conclude that the LON:DLG stock is predictable in the short/long term. According to price forecasts for (n+16 weeks) period: The dominant strategy among neural network is to Sell LON:DLG stock.

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

Key Points

1. How do predictive algorithms actually work?
2. What is prediction in deep learning?
3. Which neural network is best for prediction?

LON:DLG Target Price Prediction Modeling Methodology

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 consider DIRECT LINE INSURANCE GROUP PLC Stock Decision Process with Multiple Regression where A is the set of discrete actions of LON:DLG 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(Multiple Regression)^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 (News Feed Sentiment Analysis)) X S(n):→ (n+16 weeks) $\begin{array}{l}\int e^x\mathrm{rx}\end{array}$

n:Time series to forecast

p:Price signals of LON:DLG 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:DLG Stock Forecast (Buy or Sell) for (n+16 weeks)

Sample Set: Neural Network
Stock/Index: LON:DLG DIRECT LINE INSURANCE GROUP PLC
Time series to forecast n: 28 Oct 2022 for (n+16 weeks)

According to price forecasts for (n+16 weeks) period: The dominant strategy among neural network is to Sell LON:DLG 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 DIRECT LINE INSURANCE GROUP PLC

1. In almost every lending transaction the creditor's instrument is ranked relative to the instruments of the debtor's other creditors. An instrument that is subordinated to other instruments may have contractual cash flows that are payments of principal and interest on the principal amount outstanding if the debtor's non-payment is a breach of contract and the holder has a contractual right to unpaid amounts of principal and interest on the principal amount outstanding even in the event of the debtor's bankruptcy. For example, a trade receivable that ranks its creditor as a general creditor would qualify as having payments of principal and interest on the principal amount outstanding. This is the case even if the debtor issued loans that are collateralised, which in the event of bankruptcy would give that loan holder priority over the claims of the general creditor in respect of the collateral but does not affect the contractual right of the general creditor to unpaid principal and other amounts due.
2. For the purpose of recognising foreign exchange gains and losses under IAS 21, a financial asset measured at fair value through other comprehensive income in accordance with paragraph 4.1.2A is treated as a monetary item. Accordingly, such a financial asset is treated as an asset measured at amortised cost in the foreign currency. Exchange differences on the amortised cost are recognised in profit or loss and other changes in the carrying amount are recognised in accordance with paragraph 5.7.10.
3. In cases such as those described in the preceding paragraph, to designate, at initial recognition, the financial assets and financial liabilities not otherwise so measured as at fair value through profit or loss may eliminate or significantly reduce the measurement or recognition inconsistency and produce more relevant information. For practical purposes, the entity need not enter into all of the assets and liabilities giving rise to the measurement or recognition inconsistency at exactly the same time. A reasonable delay is permitted provided that each transaction is designated as at fair value through profit or loss at its initial recognition and, at that time, any remaining transactions are expected to occur.
4. An entity is not required to restate prior periods to reflect the application of these amendments. The entity may restate prior periods only if it is possible to do so without the use of hindsight. If an entity restates prior periods, the restated financial statements must reflect all the requirements in this Standard for the affected financial instruments. If an entity does not restate prior periods, the entity shall recognise any difference between the previous carrying amount and the carrying amount at the beginning of the annual reporting period that includes the date of initial application of these amendments in the opening retained earnings (or other component of equity, as appropriate) of the annual reporting period that includes the date of initial application of these amendments.

*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

DIRECT LINE INSURANCE GROUP PLC assigned short-term Ba3 & long-term B2 forecasted stock rating. We evaluate the prediction models Modular Neural Network (News Feed Sentiment Analysis) with Multiple Regression^1,2,3,4 and conclude that the LON:DLG stock is predictable in the short/long term. According to price forecasts for (n+16 weeks) period: The dominant strategy among neural network is to Sell LON:DLG stock.

Financial State Forecast for LON:DLG DIRECT LINE INSURANCE GROUP PLC Stock Options & Futures

Rating	Short-Term	Long-Term Senior
Outlook*	Ba3	B2
Operational Risk	81	63
Market Risk	86	35
Technical Analysis	32	85
Fundamental Analysis	83	33
Risk Unsystematic	52	49

Prediction Confidence Score

Trust metric by Neural Network: 78 out of 100 with 741 signals.

References

1. Bottou L. 1998. Online learning and stochastic approximations. In On-Line Learning in Neural Networks, ed. D Saad, pp. 9–42. New York: ACM
2. White H. 1992. Artificial Neural Networks: Approximation and Learning Theory. Oxford, UK: Blackwell
3. Hastie T, Tibshirani R, Tibshirani RJ. 2017. Extended comparisons of best subset selection, forward stepwise selection, and the lasso. arXiv:1707.08692 [stat.ME]
4. M. J. Hausknecht and P. Stone. Deep recurrent Q-learning for partially observable MDPs. CoRR, abs/1507.06527, 2015
5. J. Peters, S. Vijayakumar, and S. Schaal. Natural actor-critic. In Proceedings of the Sixteenth European Conference on Machine Learning, pages 280–291, 2005.
6. P. Artzner, F. Delbaen, J. Eber, and D. Heath. Coherent measures of risk. Journal of Mathematical Finance, 9(3):203–228, 1999
7. J. Ott. A Markov decision model for a surveillance application and risk-sensitive Markov decision processes. PhD thesis, Karlsruhe Institute of Technology, 2010.

Frequently Asked Questions

Q: What is the prediction methodology for LON:DLG stock?
A: LON:DLG stock prediction methodology: We evaluate the prediction models Modular Neural Network (News Feed Sentiment Analysis) and Multiple Regression
Q: Is LON:DLG stock a buy or sell?
A: The dominant strategy among neural network is to Sell LON:DLG Stock.
Q: Is DIRECT LINE INSURANCE GROUP PLC stock a good investment?
A: The consensus rating for DIRECT LINE INSURANCE GROUP PLC is Sell and assigned short-term Ba3 & long-term B2 forecasted stock rating.
Q: What is the consensus rating of LON:DLG stock?
A: The consensus rating for LON:DLG is Sell.
Q: What is the prediction period for LON:DLG stock?
A: The prediction period for LON:DLG is (n+16 weeks)

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