How Is Machine Learning Used in Trading? (EGP Stock Forecast)

Stock price prediction has always been a challenging task for the researchers in financial domain. While the Efficient Market Hypothesis claims that it is impossible to predict stock prices accurately, there are work in the literature that have demonstrated that stock price movements can be forecasted with a reasonable degree of accuracy, if appropriate variables are chosen and suitable predictive models are built using those variables. In this work, we present a robust and accurate framework of stock price prediction using statistical, machine learning and deep learning methods We evaluate EastGroup Properties prediction models with Modular Neural Network (News Feed Sentiment Analysis) and Linear Regression1,2,3,4 and conclude that the EGP 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 EGP stock.


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

Key Points

  1. How do predictive algorithms actually work?
  2. Can neural networks predict stock market?
  3. What is neural prediction?

EGP Target Price Prediction Modeling Methodology

Stock price forecasting is a popular and important topic in financial and academic studies. Share market is an volatile place for predicting since there are no significant rules to estimate or predict the price of a share in the share market. Many methods like technical analysis, fundamental analysis, time series analysis and statistical analysis etc. are used to predict the price in tie share market but none of these methods are proved as a consistently acceptable prediction tool. In this paper, we implemented a Random Forest approach to predict stock market prices. We consider EastGroup Properties Stock Decision Process with Linear Regression where A is the set of discrete actions of EGP 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(Linear 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(Modular Neural Network (News Feed Sentiment Analysis)) X S(n):→ (n+4 weeks) i = 1 n a i

n:Time series to forecast

p:Price signals of EGP 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?

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

Sample Set: Neural Network
Stock/Index: EGP EastGroup Properties
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 EGP 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

EastGroup Properties assigned short-term Ba3 & long-term B1 forecasted stock rating. We evaluate the prediction models Modular Neural Network (News Feed Sentiment Analysis) with Linear Regression1,2,3,4 and conclude that the EGP 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 EGP stock.

Financial State Forecast for EGP Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*Ba3B1
Operational Risk 5870
Market Risk3962
Technical Analysis6452
Fundamental Analysis7351
Risk Unsystematic8860

Prediction Confidence Score

Trust metric by Neural Network: 80 out of 100 with 770 signals.

References

  1. Hartford J, Lewis G, Taddy M. 2016. Counterfactual prediction with deep instrumental variables networks. arXiv:1612.09596 [stat.AP]
  2. J. Filar, D. Krass, and K. Ross. Percentile performance criteria for limiting average Markov decision pro- cesses. IEEE Transaction of Automatic Control, 40(1):2–10, 1995.
  3. Alexander, J. C. Jr. (1995), "Refining the degree of earnings surprise: A comparison of statistical and analysts' forecasts," Financial Review, 30, 469–506.
  4. R. Howard and J. Matheson. Risk sensitive Markov decision processes. Management Science, 18(7):356– 369, 1972
  5. L. Prashanth and M. Ghavamzadeh. Actor-critic algorithms for risk-sensitive MDPs. In Proceedings of Advances in Neural Information Processing Systems 26, pages 252–260, 2013.
  6. Clements, M. P. D. F. Hendry (1995), "Forecasting in cointegrated systems," Journal of Applied Econometrics, 10, 127–146.
  7. V. Borkar and R. Jain. Risk-constrained Markov decision processes. IEEE Transaction on Automatic Control, 2014
Frequently Asked QuestionsQ: What is the prediction methodology for EGP stock?
A: EGP stock prediction methodology: We evaluate the prediction models Modular Neural Network (News Feed Sentiment Analysis) and Linear Regression
Q: Is EGP stock a buy or sell?
A: The dominant strategy among neural network is to Hold EGP Stock.
Q: Is EastGroup Properties stock a good investment?
A: The consensus rating for EastGroup Properties is Hold and assigned short-term Ba3 & long-term B1 forecasted stock rating.
Q: What is the consensus rating of EGP stock?
A: The consensus rating for EGP is Hold.
Q: What is the prediction period for EGP stock?
A: The prediction period for EGP is (n+4 weeks)

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