Modelling A.I. in Economics

How do you determine buy or sell? (VMC Stock Forecast) (Forecast)

Short-term trading is a difficult task due to fluctuating demand and supply in the stock market. These demands and supply are reflected in stock prices. The stock prices may be predicted using technical indicators. Most of the existing literature considered the limited technical indicators to measure short-term prices. We have considered 82 different combinations of technical indicators to predict the stock prices. We evaluate Vulcan Materials prediction models with Supervised Machine Learning (ML) and Wilcoxon Sign-Rank Test1,2,3,4 and conclude that the VMC 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 SellHold VMC stock.


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

Key Points

  1. Is it better to buy and sell or hold?
  2. Understanding Buy, Sell, and Hold Ratings
  3. Can machine learning predict?

VMC Target Price Prediction Modeling Methodology

In today's economy, there is a profound impact of the stock market or equity market. Prediction of stock prices is extremely complex, chaotic, and the presence of a dynamic environment makes it a great challenge. Behavioural finance suggests that decision-making process of investors is to a very great extent influenced by the emotions and sentiments in response to a particular news. Thus, to support the decisions of the investors, we have presented an approach combining two distinct fields for analysis of stock exchange. We consider Vulcan Materials Stock Decision Process with Wilcoxon Sign-Rank Test where A is the set of discrete actions of VMC 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(Wilcoxon Sign-Rank Test)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(Supervised Machine Learning (ML)) X S(n):→ (n+16 weeks) e x rx

n:Time series to forecast

p:Price signals of VMC 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?

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

Sample Set: Neural Network
Stock/Index: VMC Vulcan Materials
Time series to forecast n: 31 Oct 2022 for (n+16 weeks)

According to price forecasts for (n+16 weeks) period: The dominant strategy among neural network is to SellHold VMC 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 Vulcan Materials

  1. When identifying what risk components qualify for designation as a hedged item, an entity assesses such risk components within the context of the particular market structure to which the risk or risks relate and in which the hedging activity takes place. Such a determination requires an evaluation of the relevant facts and circumstances, which differ by risk and market.
  2. If an entity prepares interim financial reports in accordance with IAS 34 Interim Financial Reporting the entity need not apply the requirements in this Standard to interim periods prior to the date of initial application if it is impracticable (as defined in IAS 8).
  3. Unless paragraph 6.8.8 applies, for a hedge of a non-contractually specified benchmark component of interest rate risk, an entity shall apply the requirement in paragraphs 6.3.7(a) and B6.3.8—that the risk component shall be separately identifiable—only at the inception of the hedging relationship.
  4. For example, an entity may use this condition to designate financial liabilities as at fair value through profit or loss if it meets the principle in paragraph 4.2.2(b) and the entity has financial assets and financial liabilities that share one or more risks and those risks are managed and evaluated on a fair value basis in accordance with a documented policy of asset and liability management. An example could be an entity that has issued 'structured products' containing multiple embedded derivatives and manages the resulting risks on a fair value basis using a mix of derivative and non-derivative financial instruments

*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

Vulcan Materials assigned short-term Ba2 & long-term Ba2 forecasted stock rating. We evaluate the prediction models Supervised Machine Learning (ML) with Wilcoxon Sign-Rank Test1,2,3,4 and conclude that the VMC 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 SellHold VMC stock.

Financial State Forecast for VMC Vulcan Materials Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*Ba2Ba2
Operational Risk 6562
Market Risk6581
Technical Analysis6175
Fundamental Analysis8463
Risk Unsystematic6759

Prediction Confidence Score

Trust metric by Neural Network: 88 out of 100 with 698 signals.

References

  1. R. Howard and J. Matheson. Risk sensitive Markov decision processes. Management Science, 18(7):356– 369, 1972
  2. Bai J, Ng S. 2002. Determining the number of factors in approximate factor models. Econometrica 70:191–221
  3. S. J. Russell and P. Norvig. Artificial Intelligence: A Modern Approach. Prentice Hall, Englewood Cliffs, NJ, 3nd edition, 2010
  4. 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
  5. Mnih A, Hinton GE. 2007. Three new graphical models for statistical language modelling. In International Conference on Machine Learning, pp. 641–48. La Jolla, CA: Int. Mach. Learn. Soc.
  6. Chernozhukov V, Chetverikov D, Demirer M, Duflo E, Hansen C, Newey W. 2017. Double/debiased/ Neyman machine learning of treatment effects. Am. Econ. Rev. 107:261–65
  7. Banerjee, A., J. J. Dolado, J. W. Galbraith, D. F. Hendry (1993), Co-integration, Error-correction, and the Econometric Analysis of Non-stationary Data. Oxford: Oxford University Press.
Frequently Asked QuestionsQ: What is the prediction methodology for VMC stock?
A: VMC stock prediction methodology: We evaluate the prediction models Supervised Machine Learning (ML) and Wilcoxon Sign-Rank Test
Q: Is VMC stock a buy or sell?
A: The dominant strategy among neural network is to SellHold VMC Stock.
Q: Is Vulcan Materials stock a good investment?
A: The consensus rating for Vulcan Materials is SellHold and assigned short-term Ba2 & long-term Ba2 forecasted stock rating.
Q: What is the consensus rating of VMC stock?
A: The consensus rating for VMC is SellHold.
Q: What is the prediction period for VMC stock?
A: The prediction period for VMC is (n+16 weeks)

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