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

Time series forecasting has been widely used to determine the future prices of stock, and the analysis and modeling of finance time series importantly guide investors' decisions and trades. In addition, in a dynamic environment such as the stock market, the nonlinearity of the time series is pronounced, immediately affecting the efficacy of stock price forecasts. Thus, this paper proposes an intelligent time series prediction system that uses sliding-window metaheuristic optimization for the purpose of predicting the stock prices. We evaluate Activision Blizzard prediction models with Supervised Machine Learning (ML) and Linear Regression^1,2,3,4 and conclude that the ATVI stock is predictable in the short/long term. According to price forecasts for (n+6 month) period: The dominant strategy among neural network is to Sell ATVI stock.

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

Key Points

1. Decision Making
2. Why do we need predictive models?
3. What are the most successful trading algorithms?

ATVI Target Price Prediction Modeling Methodology

Stock market prediction is a major exertion in the field of finance and establishing businesses. Stock market is totally uncertain as the prices of stocks keep fluctuating on a daily basis because of numerous factors that influence it. One of the traditional ways of predicting stock prices was by using only historical data. But with time it was observed that other factors such as peoples' sentiments and other news events occurring in and around the country affect the stock market, for e.g. national elections, natural calamity etc. We consider Activision Blizzard Stock Decision Process with Linear Regression where A is the set of discrete actions of ATVI 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= $\begin{array}{cccc}{p}_{\mathrm{a}1}& p_{\mathrm{a}2}& \dots & p_{1n}\\ & ⋮\\ p_{j1}& p_{j2}& \dots & p_{jn}\\ & ⋮\\ p_{k1}& p_{k2}& \dots & p_{kn}\\ & ⋮\\ p_{n1}& p_{n2}& \dots & p_{nn}\end{array}$ X R(Supervised Machine Learning (ML)) X S(n):→ (n+6 month) $\sum _{i=1}^n\left(a_i\right)$

n:Time series to forecast

p:Price signals of ATVI 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?

ATVI Stock Forecast (Buy or Sell) for (n+6 month)

Sample Set: Neural Network
Stock/Index: ATVI Activision Blizzard
Time series to forecast n: 16 Oct 2022 for (n+6 month)

According to price forecasts for (n+6 month) period: The dominant strategy among neural network is to Sell ATVI 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

Activision Blizzard assigned short-term Baa2 & long-term B1 forecasted stock rating. We evaluate the prediction models Supervised Machine Learning (ML) with Linear Regression^1,2,3,4 and conclude that the ATVI stock is predictable in the short/long term. According to price forecasts for (n+6 month) period: The dominant strategy among neural network is to Sell ATVI stock.

Financial State Forecast for ATVI Stock Options & Futures

Rating	Short-Term	Long-Term Senior
Outlook*	Baa2	B1
Operational Risk	48	44
Market Risk	89	60
Technical Analysis	75	54
Fundamental Analysis	76	77
Risk Unsystematic	77	61

Prediction Confidence Score

Trust metric by Neural Network: 88 out of 100 with 686 signals.

References

1. G. Shani, R. Brafman, and D. Heckerman. An MDP-based recommender system. In Proceedings of the Eigh- teenth conference on Uncertainty in artificial intelligence, pages 453–460. Morgan Kaufmann Publishers Inc., 2002
2. Hoerl AE, Kennard RW. 1970. Ridge regression: biased estimation for nonorthogonal problems. Technometrics 12:55–67
3. Jacobs B, Donkers B, Fok D. 2014. Product Recommendations Based on Latent Purchase Motivations. Rotterdam, Neth.: ERIM
4. Alpaydin E. 2009. Introduction to Machine Learning. Cambridge, MA: MIT Press
5. Babula, R. A. (1988), "Contemporaneous correlation and modeling Canada's imports of U.S. crops," Journal of Agricultural Economics Research, 41, 33–38.
6. Brailsford, T.J. R.W. Faff (1996), "An evaluation of volatility forecasting techniques," Journal of Banking Finance, 20, 419–438.
7. Bessler, D. A. R. A. Babula, (1987), "Forecasting wheat exports: Do exchange rates matter?" Journal of Business and Economic Statistics, 5, 397–406.

Frequently Asked Questions

Q: What is the prediction methodology for ATVI stock?
A: ATVI stock prediction methodology: We evaluate the prediction models Supervised Machine Learning (ML) and Linear Regression
Q: Is ATVI stock a buy or sell?
A: The dominant strategy among neural network is to Sell ATVI Stock.
Q: Is Activision Blizzard stock a good investment?
A: The consensus rating for Activision Blizzard is Sell and assigned short-term Baa2 & long-term B1 forecasted stock rating.
Q: What is the consensus rating of ATVI stock?
A: The consensus rating for ATVI is Sell.
Q: What is the prediction period for ATVI stock?
A: The prediction period for ATVI is (n+6 month)

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