Modelling A.I. in Economics

Is LON:CTY a Buy? (Forecast)

The stock market prediction has attracted much attention from academia as well as business. Due to the non-linear, volatile and complex nature of the market, it is quite difficult to predict. As the stock markets grow bigger, more investors pay attention to develop a systematic approach to predict the stock market. We evaluate CITY OF LONDON INVESTMENT TRUST PLC prediction models with Modular Neural Network (Market Volatility Analysis) and Wilcoxon Rank-Sum Test1,2,3,4 and conclude that the LON:CTY 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 Buy LON:CTY stock.


Keywords: LON:CTY, CITY OF LONDON INVESTMENT TRUST PLC, stock forecast, machine learning based prediction, risk rating, buy-sell behaviour, stock analysis, target price analysis, options and futures.

Key Points

  1. Fundemental Analysis with Algorithmic Trading
  2. How do you pick a stock?
  3. Technical Analysis with Algorithmic Trading

LON:CTY Target Price Prediction Modeling Methodology

Stock market or Share market is one of the most complicated and sophisticated way to do business. Small ownerships, brokerage corporations, banking sector, all depend on this very body to make revenue and divide risks; a very complicated model. However, this paper proposes to use machine learning algorithm to predict the future stock price for exchange by using open source libraries and preexisting algorithms to help make this unpredictable format of business a little more predictable. We consider CITY OF LONDON INVESTMENT TRUST PLC Stock Decision Process with Wilcoxon Rank-Sum Test where A is the set of discrete actions of LON:CTY 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 Rank-Sum 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(Modular Neural Network (Market Volatility Analysis)) X S(n):→ (n+8 weeks) R = r 1 r 2 r 3

n:Time series to forecast

p:Price signals of LON:CTY 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?

LON:CTY Stock Forecast (Buy or Sell) for (n+8 weeks)

Sample Set: Neural Network
Stock/Index: LON:CTY CITY OF LONDON INVESTMENT TRUST PLC
Time series to forecast n: 15 Oct 2022 for (n+8 weeks)

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

CITY OF LONDON INVESTMENT TRUST PLC assigned short-term Ba3 & long-term B2 forecasted stock rating. We evaluate the prediction models Modular Neural Network (Market Volatility Analysis) with Wilcoxon Rank-Sum Test1,2,3,4 and conclude that the LON:CTY 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 Buy LON:CTY stock.

Financial State Forecast for LON:CTY Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*Ba3B2
Operational Risk 5485
Market Risk7640
Technical Analysis6231
Fundamental Analysis5848
Risk Unsystematic7439

Prediction Confidence Score

Trust metric by Neural Network: 84 out of 100 with 863 signals.

References

  1. J. Ott. A Markov decision model for a surveillance application and risk-sensitive Markov decision processes. PhD thesis, Karlsruhe Institute of Technology, 2010.
  2. J. Harb and D. Precup. Investigating recurrence and eligibility traces in deep Q-networks. In Deep Reinforcement Learning Workshop, NIPS 2016, Barcelona, Spain, 2016.
  3. M. Colby, T. Duchow-Pressley, J. J. Chung, and K. Tumer. Local approximation of difference evaluation functions. In Proceedings of the Fifteenth International Joint Conference on Autonomous Agents and Multiagent Systems, Singapore, May 2016
  4. Arjovsky M, Bottou L. 2017. Towards principled methods for training generative adversarial networks. arXiv:1701.04862 [stat.ML]
  5. Hoerl AE, Kennard RW. 1970. Ridge regression: biased estimation for nonorthogonal problems. Technometrics 12:55–67
  6. Andrews, D. W. K. (1993), "Tests for parameter instability and structural change with unknown change point," Econometrica, 61, 821–856.
  7. E. Altman, K. Avrachenkov, and R. N ́u ̃nez-Queija. Perturbation analysis for denumerable Markov chains with application to queueing models. Advances in Applied Probability, pages 839–853, 2004
Frequently Asked QuestionsQ: What is the prediction methodology for LON:CTY stock?
A: LON:CTY stock prediction methodology: We evaluate the prediction models Modular Neural Network (Market Volatility Analysis) and Wilcoxon Rank-Sum Test
Q: Is LON:CTY stock a buy or sell?
A: The dominant strategy among neural network is to Buy LON:CTY Stock.
Q: Is CITY OF LONDON INVESTMENT TRUST PLC stock a good investment?
A: The consensus rating for CITY OF LONDON INVESTMENT TRUST PLC is Buy and assigned short-term Ba3 & long-term B2 forecasted stock rating.
Q: What is the consensus rating of LON:CTY stock?
A: The consensus rating for LON:CTY is Buy.
Q: What is the prediction period for LON:CTY stock?
A: The prediction period for LON:CTY is (n+8 weeks)

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