Does algo trading work? (SBUX Stock Forecast)

The stock market prediction patterns are seen as an important activity and it is more effective. Hence, stock prices will lead to lucrative profits from sound taking decisions. Because of the stagnant and noisy data, stock market-related forecasts are a major challenge for investors. Therefore, forecasting the stock market is a major challenge for investors to use their money to make more profit. Stock market predictions use mathematical strategies and learning tools. We evaluate Starbucks prediction models with Modular Neural Network (DNN Layer) and Paired T-Test^1,2,3,4 and conclude that the SBUX 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 Hold SBUX stock.

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

Key Points

1. Can stock prices be predicted?
2. Can we predict stock market using machine learning?
3. Fundemental Analysis with Algorithmic Trading

SBUX Target Price Prediction Modeling Methodology

Efficient Market Hypothesis (EMH) is the cornerstone of the modern financial theory and it states that it is impossible to predict the price of any stock using any trend, fundamental or technical analysis. Stock trading is one of the most important activities in the world of finance. Stock price prediction has been an age-old problem and many researchers from academia and business have tried to solve it using many techniques ranging from basic statistics to machine learning using relevant information such as news sentiment and historical prices. We consider Starbucks Stock Decision Process with Paired T-Test where A is the set of discrete actions of SBUX 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(Paired T-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 (DNN Layer)) X S(n):→ (n+16 weeks) $\overrightarrow{S}=\left(s_1,s_2,s_3\right)$

n:Time series to forecast

p:Price signals of SBUX 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?

SBUX Stock Forecast (Buy or Sell) for (n+16 weeks)

Sample Set: Neural Network
Stock/Index: SBUX Starbucks
Time series to forecast n: 22 Oct 2022 for (n+16 weeks)

According to price forecasts for (n+16 weeks) period: The dominant strategy among neural network is to Hold SBUX 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

Starbucks assigned short-term B2 & long-term Ba3 forecasted stock rating. We evaluate the prediction models Modular Neural Network (DNN Layer) with Paired T-Test^1,2,3,4 and conclude that the SBUX 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 Hold SBUX stock.

Financial State Forecast for SBUX Stock Options & Futures

Rating	Short-Term	Long-Term Senior
Outlook*	B2	Ba3
Operational Risk	80	58
Market Risk	40	60
Technical Analysis	37	71
Fundamental Analysis	85	57
Risk Unsystematic	47	85

Prediction Confidence Score

Trust metric by Neural Network: 84 out of 100 with 825 signals.

References

1. White H. 1992. Artificial Neural Networks: Approximation and Learning Theory. Oxford, UK: Blackwell
2. Chernozhukov V, Demirer M, Duflo E, Fernandez-Val I. 2018b. Generic machine learning inference on heteroge- nous treatment effects in randomized experiments. NBER Work. Pap. 24678
3. Bera, A. M. L. Higgins (1997), "ARCH and bilinearity as competing models for nonlinear dependence," Journal of Business Economic Statistics, 15, 43–50.
4. Abadie A, Diamond A, Hainmueller J. 2015. Comparative politics and the synthetic control method. Am. J. Political Sci. 59:495–510
5. Alexander, J. C. Jr. (1995), "Refining the degree of earnings surprise: A comparison of statistical and analysts' forecasts," Financial Review, 30, 469–506.
6. M. J. Hausknecht and P. Stone. Deep recurrent Q-learning for partially observable MDPs. CoRR, abs/1507.06527, 2015
7. Bai J. 2003. Inferential theory for factor models of large dimensions. Econometrica 71:135–71

Frequently Asked Questions

Q: What is the prediction methodology for SBUX stock?
A: SBUX stock prediction methodology: We evaluate the prediction models Modular Neural Network (DNN Layer) and Paired T-Test
Q: Is SBUX stock a buy or sell?
A: The dominant strategy among neural network is to Hold SBUX Stock.
Q: Is Starbucks stock a good investment?
A: The consensus rating for Starbucks is Hold and assigned short-term B2 & long-term Ba3 forecasted stock rating.
Q: What is the consensus rating of SBUX stock?
A: The consensus rating for SBUX is Hold.
Q: What is the prediction period for SBUX stock?
A: The prediction period for SBUX is (n+16 weeks)

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