How accurate is machine learning in stock market? (TD Stock Forecast)

Stock market prediction is a crucial and challenging task due to its nonlinear, evolutionary, complex, and dynamic nature. Research on the stock market has been an important issue for researchers in recent years. Companies invest in trading the stock market. Predicting the stock market trend accurately will minimize the risk and bring a maximum amount of profit for all the stakeholders. During the last several years, a lot of studies have been done to predict stock market trends using Traditional, Machine learning and deep learning techniques. We evaluate Toronto-Dominion Bank prediction models with Modular Neural Network (Market News Sentiment Analysis) and Stepwise Regression^1,2,3,4 and conclude that the TD 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 TD stock.

Keywords: TD, Toronto-Dominion Bank, stock forecast, machine learning based prediction, risk rating, buy-sell behaviour, stock analysis, target price analysis, options and futures.

Key Points

1. Stock Rating
2. Decision Making
3. What is the use of Markov decision process?

TD Target Price Prediction Modeling Methodology

The search for models to predict the prices of financial markets is still a highly researched topic, despite major related challenges. The prices of financial assets are non-linear, dynamic, and chaotic; thus, they are financial time series that are difficult to predict. Among the latest techniques, machine learning models are some of the most researched, given their capabilities for recognizing complex patterns in various applications. We consider Toronto-Dominion Bank Stock Decision Process with Stepwise Regression where A is the set of discrete actions of TD 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(Stepwise 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 (Market News Sentiment Analysis)) X S(n):→ (n+4 weeks) $\sum _{i=1}^n\left(s_i\right)$

n:Time series to forecast

p:Price signals of TD 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?

TD Stock Forecast (Buy or Sell) for (n+4 weeks)

Sample Set: Neural Network
Stock/Index: TD Toronto-Dominion Bank
Time series to forecast n: 23 Oct 2022 for (n+4 weeks)

According to price forecasts for (n+4 weeks) period: The dominant strategy among neural network is to Hold TD 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

Toronto-Dominion Bank assigned short-term B3 & long-term B1 forecasted stock rating. We evaluate the prediction models Modular Neural Network (Market News Sentiment Analysis) with Stepwise Regression^1,2,3,4 and conclude that the TD 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 TD stock.

Financial State Forecast for TD Stock Options & Futures

Rating	Short-Term	Long-Term Senior
Outlook*	B3	B1
Operational Risk	30	77
Market Risk	42	67
Technical Analysis	34	42
Fundamental Analysis	75	39
Risk Unsystematic	59	64

Prediction Confidence Score

Trust metric by Neural Network: 93 out of 100 with 453 signals.

References

1. Ashley, R. (1983), "On the usefulness of macroeconomic forecasts as inputs to forecasting models," Journal of Forecasting, 2, 211–223.
2. Jiang N, Li L. 2016. Doubly robust off-policy value evaluation for reinforcement learning. In Proceedings of the 33rd International Conference on Machine Learning, pp. 652–61. La Jolla, CA: Int. Mach. Learn. Soc.
3. Li L, Chu W, Langford J, Moon T, Wang X. 2012. An unbiased offline evaluation of contextual bandit algo- rithms with generalized linear models. In Proceedings of 4th ACM International Conference on Web Search and Data Mining, pp. 297–306. New York: ACM
4. Imbens GW, Lemieux T. 2008. Regression discontinuity designs: a guide to practice. J. Econom. 142:615–35
5. R. Howard and J. Matheson. Risk sensitive Markov decision processes. Management Science, 18(7):356– 369, 1972
6. J. Peters, S. Vijayakumar, and S. Schaal. Natural actor-critic. In Proceedings of the Sixteenth European Conference on Machine Learning, pages 280–291, 2005.
7. Hartford J, Lewis G, Taddy M. 2016. Counterfactual prediction with deep instrumental variables networks. arXiv:1612.09596 [stat.AP]

Frequently Asked Questions

Q: What is the prediction methodology for TD stock?
A: TD stock prediction methodology: We evaluate the prediction models Modular Neural Network (Market News Sentiment Analysis) and Stepwise Regression
Q: Is TD stock a buy or sell?
A: The dominant strategy among neural network is to Hold TD Stock.
Q: Is Toronto-Dominion Bank stock a good investment?
A: The consensus rating for Toronto-Dominion Bank is Hold and assigned short-term B3 & long-term B1 forecasted stock rating.
Q: What is the consensus rating of TD stock?
A: The consensus rating for TD is Hold.
Q: What is the prediction period for TD stock?
A: The prediction period for TD is (n+4 weeks)

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