Modelling A.I. in Economics

How do you decide buy or sell a stock? (KR Stock Forecast) (Forecast)

Recurrent Neural Networks (RNNs) is a sub type of neural networks that use feedback connections. Several types of RNN models are used in predicting financial time series. This study was conducted to develop models to predict daily stock prices based on Recurrent Neural Network (RNN) Approach and to measure the accuracy of the models developed and identify the shortcomings of the models if present. We evaluate Kroger prediction models with Modular Neural Network (DNN Layer) and Pearson Correlation1,2,3,4 and conclude that the KR stock is predictable in the short/long term. According to price forecasts for (n+8 weeks) period: The dominant strategy among neural network is to Hold KR stock.


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

Key Points

  1. What are the most successful trading algorithms?
  2. How do predictive algorithms actually work?
  3. Can statistics predict the future?

KR Target Price Prediction Modeling Methodology

The success of portfolio construction depends primarily on the future performance of stock markets. Recent developments in machine learning have brought significant opportunities to incorporate prediction theory into portfolio selection. However, many studies show that a single prediction model is insufficient to achieve very accurate predictions and affluent returns. In this paper, a novel portfolio construction approach is developed using a hybrid model based on machine learning for stock prediction. We consider Kroger Stock Decision Process with Pearson Correlation where A is the set of discrete actions of KR 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(Pearson Correlation)5,6,7= p a 1 p a 2 p 1 n p j 1 p j 2 p j n p k 1 p k 2 p k n p n 1 p n 2 p n n X R(Modular Neural Network (DNN Layer)) X S(n):→ (n+8 weeks) i = 1 n r i

n:Time series to forecast

p:Price signals of KR 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?

KR Stock Forecast (Buy or Sell) for (n+8 weeks)

Sample Set: Neural Network
Stock/Index: KR Kroger
Time series to forecast n: 19 Oct 2022 for (n+8 weeks)

According to price forecasts for (n+8 weeks) period: The dominant strategy among neural network is to Hold KR 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

Kroger assigned short-term B2 & long-term Ba3 forecasted stock rating. We evaluate the prediction models Modular Neural Network (DNN Layer) with Pearson Correlation1,2,3,4 and conclude that the KR stock is predictable in the short/long term. According to price forecasts for (n+8 weeks) period: The dominant strategy among neural network is to Hold KR stock.

Financial State Forecast for KR Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B2Ba3
Operational Risk 7665
Market Risk5672
Technical Analysis4667
Fundamental Analysis5075
Risk Unsystematic6048

Prediction Confidence Score

Trust metric by Neural Network: 84 out of 100 with 511 signals.

References

  1. Kallus N. 2017. Balanced policy evaluation and learning. arXiv:1705.07384 [stat.ML]
  2. Scholkopf B, Smola AJ. 2001. Learning with Kernels: Support Vector Machines, Regularization, Optimization, and Beyond. Cambridge, MA: MIT Press
  3. Varian HR. 2014. Big data: new tricks for econometrics. J. Econ. Perspect. 28:3–28
  4. Athey S, Imbens GW. 2017a. The econometrics of randomized experiments. In Handbook of Economic Field Experiments, Vol. 1, ed. E Duflo, A Banerjee, pp. 73–140. Amsterdam: Elsevier
  5. Bennett J, Lanning S. 2007. The Netflix prize. In Proceedings of KDD Cup and Workshop 2007, p. 35. New York: ACM
  6. M. Sobel. The variance of discounted Markov decision processes. Applied Probability, pages 794–802, 1982
  7. Gentzkow M, Kelly BT, Taddy M. 2017. Text as data. NBER Work. Pap. 23276
Frequently Asked QuestionsQ: What is the prediction methodology for KR stock?
A: KR stock prediction methodology: We evaluate the prediction models Modular Neural Network (DNN Layer) and Pearson Correlation
Q: Is KR stock a buy or sell?
A: The dominant strategy among neural network is to Hold KR Stock.
Q: Is Kroger stock a good investment?
A: The consensus rating for Kroger is Hold and assigned short-term B2 & long-term Ba3 forecasted stock rating.
Q: What is the consensus rating of KR stock?
A: The consensus rating for KR is Hold.
Q: What is the prediction period for KR stock?
A: The prediction period for KR is (n+8 weeks)

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