Is IBM a Buy?

In the finance world stock trading is one of the most important activities. Stock market prediction is an act of trying to determine the future value of a stock other financial instrument traded on a financial exchange. This paper explains the prediction of a stock using Machine Learning. The technical and fundamental or the time series analysis is used by the most of the stockbrokers while making the stock predictions. We evaluate IBM prediction models with Modular Neural Network (News Feed Sentiment Analysis) and Multiple Regression^1,2,3,4 and conclude that the IBM 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 IBM stock.

Keywords: IBM, IBM, 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. What are the most successful trading algorithms?
3. How do predictive algorithms actually work?

IBM Target Price Prediction Modeling Methodology

Nowadays, people show more and more enthusiasm for applying machine learning methods to finance domain. Many scholars and investors are trying to discover the mystery behind the stock market by applying deep learning. This thesis compares four machine learning methods: long short-term memory (LSTM), gated recurrent units (GRU), support vector machine (SVM), and eXtreme gradient boosting (XGBoost) to test which one performs the best in predicting the stock trend. We consider IBM Stock Decision Process with Multiple Regression where A is the set of discrete actions of IBM 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(Multiple 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(Modular Neural Network (News Feed Sentiment Analysis)) X S(n):→ (n+8 weeks) $\sum _{i=1}^n\left(s_i\right)$

n:Time series to forecast

p:Price signals of IBM 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?

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

Sample Set: Neural Network
Stock/Index: IBM IBM
Time series to forecast n: 05 Oct 2022 for (n+8 weeks)

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

IBM assigned short-term B2 & long-term B1 forecasted stock rating. We evaluate the prediction models Modular Neural Network (News Feed Sentiment Analysis) with Multiple Regression^1,2,3,4 and conclude that the IBM 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 IBM stock.

Financial State Forecast for IBM Stock Options & Futures

Rating	Short-Term	Long-Term Senior
Outlook*	B2	B1
Operational Risk	71	84
Market Risk	59	34
Technical Analysis	51	60
Fundamental Analysis	33	41
Risk Unsystematic	63	59

Prediction Confidence Score

Trust metric by Neural Network: 89 out of 100 with 802 signals.

References

1. Bottou L. 1998. Online learning and stochastic approximations. In On-Line Learning in Neural Networks, ed. D Saad, pp. 9–42. New York: ACM
2. M. L. Littman. Markov games as a framework for multi-agent reinforcement learning. In Ma- chine Learning, Proceedings of the Eleventh International Conference, Rutgers University, New Brunswick, NJ, USA, July 10-13, 1994, pages 157–163, 1994
3. 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
4. Cortes C, Vapnik V. 1995. Support-vector networks. Mach. Learn. 20:273–97
5. Chernozhukov V, Chetverikov D, Demirer M, Duflo E, Hansen C, et al. 2018a. Double/debiased machine learning for treatment and structural parameters. Econom. J. 21:C1–68
6. Akgiray, V. (1989), "Conditional heteroscedasticity in time series of stock returns: Evidence and forecasts," Journal of Business, 62, 55–80.
7. Mullainathan S, Spiess J. 2017. Machine learning: an applied econometric approach. J. Econ. Perspect. 31:87–106

Frequently Asked Questions

Q: What is the prediction methodology for IBM stock?
A: IBM stock prediction methodology: We evaluate the prediction models Modular Neural Network (News Feed Sentiment Analysis) and Multiple Regression
Q: Is IBM stock a buy or sell?
A: The dominant strategy among neural network is to Hold IBM Stock.
Q: Is IBM stock a good investment?
A: The consensus rating for IBM is Hold and assigned short-term B2 & long-term B1 forecasted stock rating.
Q: What is the consensus rating of IBM stock?
A: The consensus rating for IBM is Hold.
Q: What is the prediction period for IBM stock?
A: The prediction period for IBM is (n+8 weeks)

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