Modelling A.I. in Economics

How do you know when a stock will go up or down? (LNC Stock Forecast) (Forecast)

Predictions on stock market prices are a great challenge due to the fact that it is an immensely complex, chaotic and dynamic environment. There are many studies from various areas aiming to take on that challenge and Machine Learning approaches have been the focus of many of them. There are many examples of Machine Learning algorithms been able to reach satisfactory results when doing that type of prediction. This article studies the usage of LSTM networks on that scenario, to predict future trends of stock prices based on the price history, alongside with technical analysis indicators. We evaluate Lincoln Financial prediction models with Multi-Instance Learning (ML) and Stepwise Regression1,2,3,4 and conclude that the LNC 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 LNC stock.


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

Key Points

  1. Buy, Sell and Hold Signals
  2. Can machine learning predict?
  3. What are the most successful trading algorithms?

LNC Target Price Prediction Modeling Methodology

Accurate prediction of stock market returns is a very challenging task due to volatile and non-linear nature of the financial stock markets. With the introduction of artificial intelligence and increased computational capabilities, programmed methods of prediction have proved to be more efficient in predicting stock prices. We consider Lincoln Financial Stock Decision Process with Stepwise Regression where A is the set of discrete actions of LNC 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= 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(Multi-Instance Learning (ML)) X S(n):→ (n+4 weeks) R = r 1 r 2 r 3

n:Time series to forecast

p:Price signals of LNC 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?

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

Sample Set: Neural Network
Stock/Index: LNC Lincoln Financial
Time series to forecast n: 04 Oct 2022 for (n+4 weeks)

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

Lincoln Financial assigned short-term B2 & long-term B1 forecasted stock rating. We evaluate the prediction models Multi-Instance Learning (ML) with Stepwise Regression1,2,3,4 and conclude that the LNC 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 LNC stock.

Financial State Forecast for LNC Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B2B1
Operational Risk 5388
Market Risk3434
Technical Analysis9074
Fundamental Analysis4151
Risk Unsystematic6648

Prediction Confidence Score

Trust metric by Neural Network: 89 out of 100 with 459 signals.

References

  1. Imbens GW, Rubin DB. 2015. Causal Inference in Statistics, Social, and Biomedical Sciences. Cambridge, UK: Cambridge Univ. Press
  2. A. Tamar, D. Di Castro, and S. Mannor. Policy gradients with variance related risk criteria. In Proceedings of the Twenty-Ninth International Conference on Machine Learning, pages 387–396, 2012.
  3. Bessler, D. A. R. A. Babula, (1987), "Forecasting wheat exports: Do exchange rates matter?" Journal of Business and Economic Statistics, 5, 397–406.
  4. J. Baxter and P. Bartlett. Infinite-horizon policy-gradient estimation. Journal of Artificial Intelligence Re- search, 15:319–350, 2001.
  5. J. N. Foerster, Y. M. Assael, N. de Freitas, and S. Whiteson. Learning to communicate with deep multi-agent reinforcement learning. In Advances in Neural Information Processing Systems 29: Annual Conference on Neural Information Processing Systems 2016, December 5-10, 2016, Barcelona, Spain, pages 2137–2145, 2016.
  6. Bera, A. M. L. Higgins (1997), "ARCH and bilinearity as competing models for nonlinear dependence," Journal of Business Economic Statistics, 15, 43–50.
  7. Barrett, C. B. (1997), "Heteroscedastic price forecasting for food security management in developing countries," Oxford Development Studies, 25, 225–236.
Frequently Asked QuestionsQ: What is the prediction methodology for LNC stock?
A: LNC stock prediction methodology: We evaluate the prediction models Multi-Instance Learning (ML) and Stepwise Regression
Q: Is LNC stock a buy or sell?
A: The dominant strategy among neural network is to Hold LNC Stock.
Q: Is Lincoln Financial stock a good investment?
A: The consensus rating for Lincoln Financial is Hold and assigned short-term B2 & long-term B1 forecasted stock rating.
Q: What is the consensus rating of LNC stock?
A: The consensus rating for LNC is Hold.
Q: What is the prediction period for LNC stock?
A: The prediction period for LNC is (n+4 weeks)

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