Modelling A.I. in Economics

LON:LIT Options & Futures Prediction (Forecast)

Investors raise profit from stock market by maximising gains and minimising loses. The profit is difficult to raise because of the volatile nature of stock market prices. Predictive modelling allows investors to make informed decisions. We evaluate LITIGATION CAPITAL MANAGEMENT LIMITED prediction models with Modular Neural Network (Financial Sentiment Analysis) and Ridge Regression1,2,3,4 and conclude that the LON:LIT stock is predictable in the short/long term. According to price forecasts for (n+3 month) period: The dominant strategy among neural network is to Buy LON:LIT stock.


Keywords: LON:LIT, LITIGATION CAPITAL MANAGEMENT LIMITED, stock forecast, machine learning based prediction, risk rating, buy-sell behaviour, stock analysis, target price analysis, options and futures.

Key Points

  1. What is prediction model?
  2. Fundemental Analysis with Algorithmic Trading
  3. Should I buy stocks now or wait amid such uncertainty?

LON:LIT Target Price Prediction Modeling Methodology

In this paper, we propose a hybrid machine learning system based on Genetic Algor ithm (GA) and Support Vector Machines (SVM) for stock market prediction. A variety of indicators from the technical analysis field of study are used as input features. We also make use of the correlation between stock prices of different companies to forecast the price of a stock, making use of technical indicators of highly correlated stocks, not only the stock to be predicted. The genetic algorithm is used to select the set of most informative input features from among all the technical indicators. We consider LITIGATION CAPITAL MANAGEMENT LIMITED Stock Decision Process with Ridge Regression where A is the set of discrete actions of LON:LIT 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(Ridge 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 (Financial Sentiment Analysis)) X S(n):→ (n+3 month) e x rx

n:Time series to forecast

p:Price signals of LON:LIT 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:LIT Stock Forecast (Buy or Sell) for (n+3 month)

Sample Set: Neural Network
Stock/Index: LON:LIT LITIGATION CAPITAL MANAGEMENT LIMITED
Time series to forecast n: 31 Oct 2022 for (n+3 month)

According to price forecasts for (n+3 month) period: The dominant strategy among neural network is to Buy LON:LIT 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%

Adjusted IFRS* Prediction Methods for LITIGATION CAPITAL MANAGEMENT LIMITED

  1. At the date of initial application, an entity shall assess whether a financial asset meets the condition in paragraphs 4.1.2(a) or 4.1.2A(a) on the basis of the facts and circumstances that exist at that date. The resulting classification shall be applied retrospectively irrespective of the entity's business model in prior reporting periods.
  2. When designating a group of items as the hedged item, or a combination of financial instruments as the hedging instrument, an entity shall prospectively cease applying paragraphs 6.8.4–6.8.6 to an individual item or financial instrument in accordance with paragraphs 6.8.9, 6.8.10, or 6.8.11, as relevant, when the uncertainty arising from interest rate benchmark reform is no longer present with respect to the hedged risk and/or the timing and the amount of the interest rate benchmark-based cash flows of that item or financial instrument.
  3. At the date of initial application, an entity shall determine whether the treatment in paragraph 5.7.7 would create or enlarge an accounting mismatch in profit or loss on the basis of the facts and circumstances that exist at the date of initial application. This Standard shall be applied retrospectively on the basis of that determination.
  4. For the purposes of the transition provisions in paragraphs 7.2.1, 7.2.3–7.2.28 and 7.3.2, the date of initial application is the date when an entity first applies those requirements of this Standard and must be the beginning of a reporting period after the issue of this Standard. Depending on the entity's chosen approach to applying IFRS 9, the transition can involve one or more than one date of initial application for different requirements.

*International Financial Reporting Standards (IFRS) are a set of accounting rules for the financial statements of public companies that are intended to make them consistent, transparent, and easily comparable around the world.

Conclusions

LITIGATION CAPITAL MANAGEMENT LIMITED assigned short-term Ba3 & long-term Baa2 forecasted stock rating. We evaluate the prediction models Modular Neural Network (Financial Sentiment Analysis) with Ridge Regression1,2,3,4 and conclude that the LON:LIT stock is predictable in the short/long term. According to price forecasts for (n+3 month) period: The dominant strategy among neural network is to Buy LON:LIT stock.

Financial State Forecast for LON:LIT LITIGATION CAPITAL MANAGEMENT LIMITED Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*Ba3Baa2
Operational Risk 4573
Market Risk7983
Technical Analysis8665
Fundamental Analysis6682
Risk Unsystematic4187

Prediction Confidence Score

Trust metric by Neural Network: 93 out of 100 with 686 signals.

References

  1. A. K. Agogino and K. Tumer. Analyzing and visualizing multiagent rewards in dynamic and stochastic environments. Journal of Autonomous Agents and Multi-Agent Systems, 17(2):320–338, 2008
  2. Breusch, T. S. (1978), "Testing for autocorrelation in dynamic linear models," Australian Economic Papers, 17, 334–355.
  3. D. Bertsekas and J. Tsitsiklis. Neuro-dynamic programming. Athena Scientific, 1996.
  4. Efron B, Hastie T, Johnstone I, Tibshirani R. 2004. Least angle regression. Ann. Stat. 32:407–99
  5. Abadie A, Cattaneo MD. 2018. Econometric methods for program evaluation. Annu. Rev. Econ. 10:465–503
  6. M. Petrik and D. Subramanian. An approximate solution method for large risk-averse Markov decision processes. In Proceedings of the 28th International Conference on Uncertainty in Artificial Intelligence, 2012.
  7. R. Rockafellar and S. Uryasev. Conditional value-at-risk for general loss distributions. Journal of Banking and Finance, 26(7):1443 – 1471, 2002
Frequently Asked QuestionsQ: What is the prediction methodology for LON:LIT stock?
A: LON:LIT stock prediction methodology: We evaluate the prediction models Modular Neural Network (Financial Sentiment Analysis) and Ridge Regression
Q: Is LON:LIT stock a buy or sell?
A: The dominant strategy among neural network is to Buy LON:LIT Stock.
Q: Is LITIGATION CAPITAL MANAGEMENT LIMITED stock a good investment?
A: The consensus rating for LITIGATION CAPITAL MANAGEMENT LIMITED is Buy and assigned short-term Ba3 & long-term Baa2 forecasted stock rating.
Q: What is the consensus rating of LON:LIT stock?
A: The consensus rating for LON:LIT is Buy.
Q: What is the prediction period for LON:LIT stock?
A: The prediction period for LON:LIT is (n+3 month)

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