Does algo trading work? (JPM Stock Forecast) (Forecast)

Stock index price prediction is prevalent in both academic and economic fields. The index price is hard to forecast due to its uncertain noise. With the development of computer science, neural networks are applied in kinds of industrial fields. In this paper, we introduce four different methods in machine learning including three typical machine learning models: Multilayer Perceptron (MLP), Long Short Term Memory (LSTM) and Convolutional Neural Network (CNN) and one attention-based neural network. We evaluate JPMorgan Chase prediction models with Modular Neural Network (DNN Layer) and Multiple Regression^1,2,3,4 and conclude that the JPM 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 JPM stock.

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

Key Points

1. Is Target price a good indicator?
2. How do you pick a stock?
3. Can stock prices be predicted?

JPM Target Price Prediction Modeling Methodology

Impact of many factors on the stock prices makes the stock prediction a difficult and highly complicated task. In this paper, machine learning techniques have been applied for the stock price prediction in order to overcome such difficulties. In the implemented work, five models have been developed and their performances are compared in predicting the stock market trends. We consider JPMorgan Chase Stock Decision Process with Multiple Regression where A is the set of discrete actions of JPM 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 (DNN Layer)) X S(n):→ (n+3 month) $\begin{array}{l}\int e^x\mathrm{rx}\end{array}$

n:Time series to forecast

p:Price signals of JPM 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?

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

Sample Set: Neural Network
Stock/Index: JPM JPMorgan Chase
Time series to forecast n: 18 Oct 2022 for (n+3 month)

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

JPMorgan Chase assigned short-term B3 & long-term B2 forecasted stock rating. We evaluate the prediction models Modular Neural Network (DNN Layer) with Multiple Regression^1,2,3,4 and conclude that the JPM 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 JPM stock.

Financial State Forecast for JPM Stock Options & Futures

Rating	Short-Term	Long-Term Senior
Outlook*	B3	B2
Operational Risk	39	80
Market Risk	42	37
Technical Analysis	68	33
Fundamental Analysis	44	78
Risk Unsystematic	52	30

Prediction Confidence Score

Trust metric by Neural Network: 90 out of 100 with 729 signals.

References

1. M. Colby, T. Duchow-Pressley, J. J. Chung, and K. Tumer. Local approximation of difference evaluation functions. In Proceedings of the Fifteenth International Joint Conference on Autonomous Agents and Multiagent Systems, Singapore, May 2016
2. Canova, F. B. E. Hansen (1995), "Are seasonal patterns constant over time? A test for seasonal stability," Journal of Business and Economic Statistics, 13, 237–252.
3. Imbens GW, Lemieux T. 2008. Regression discontinuity designs: a guide to practice. J. Econom. 142:615–35
4. Hoerl AE, Kennard RW. 1970. Ridge regression: biased estimation for nonorthogonal problems. Technometrics 12:55–67
5. G. Theocharous and A. Hallak. Lifetime value marketing using reinforcement learning. RLDM 2013, page 19, 2013
6. 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
7. Burgess, D. F. (1975), "Duality theory and pitfalls in the specification of technologies," Journal of Econometrics, 3, 105–121.

Frequently Asked Questions

Q: What is the prediction methodology for JPM stock?
A: JPM stock prediction methodology: We evaluate the prediction models Modular Neural Network (DNN Layer) and Multiple Regression
Q: Is JPM stock a buy or sell?
A: The dominant strategy among neural network is to Hold JPM Stock.
Q: Is JPMorgan Chase stock a good investment?
A: The consensus rating for JPMorgan Chase is Hold and assigned short-term B3 & long-term B2 forecasted stock rating.
Q: What is the consensus rating of JPM stock?
A: The consensus rating for JPM is Hold.
Q: What is the prediction period for JPM stock?
A: The prediction period for JPM is (n+3 month)

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