Machine Learning stock prediction: LON:NWOR Stock Prediction

Several intelligent data mining approaches, including neural networks, have been widely employed by academics during the last decade. In today's rapidly evolving economy, stock market data prediction and analysis play a significant role. Several non-linear models like neural network, generalized autoregressive conditional heteroskedasticity (GARCH) and autoregressive conditional heteroscedasticity (ARCH) as well as linear models like Auto- Regressive Integrated Moving Average (ARIMA), Moving Average (MA) and Auto Regressive (AR) may be used for stock forecasting. We evaluate NATIONAL WORLD PLC prediction models with Modular Neural Network (Financial Sentiment Analysis) and Pearson Correlation1,2,3,4 and conclude that the LON:NWOR 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 Buy LON:NWOR stock.


Keywords: LON:NWOR, NATIONAL WORLD PLC, stock forecast, machine learning based prediction, risk rating, buy-sell behaviour, stock analysis, target price analysis, options and futures.

Key Points

  1. Is now good time to invest?
  2. Trading Interaction
  3. Short/Long Term Stocks

LON:NWOR Target Price Prediction Modeling Methodology

Predictions on stock market prices are a great challenge due to the fact that it is an immensely complex, chaotic and dynamic environment. There are many studies from various areas aiming to take on that challenge and Machine Learning approaches have been the focus of many of them. There are many examples of Machine Learning algorithms been able to reach satisfactory results when doing that type of prediction. This article studies the usage of LSTM networks on that scenario, to predict future trends of stock prices based on the price history, alongside with technical analysis indicators. We consider NATIONAL WORLD PLC Stock Decision Process with Pearson Correlation where A is the set of discrete actions of LON:NWOR 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(Pearson Correlation)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+6 month) i = 1 n a i

n:Time series to forecast

p:Price signals of LON:NWOR stock

j:Nash equilibria

k:Dominated move

a:Best response for target price

 

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LON:NWOR Stock Forecast (Buy or Sell) for (n+6 month)

Sample Set: Neural Network
Stock/Index: LON:NWOR NATIONAL WORLD PLC
Time series to forecast n: 26 Oct 2022 for (n+6 month)

According to price forecasts for (n+6 month) period: The dominant strategy among neural network is to Buy LON:NWOR 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 NATIONAL WORLD PLC

  1. To make that determination, an entity must assess whether it expects that the effects of changes in the liability's credit risk will be offset in profit or loss by a change in the fair value of another financial instrument measured at fair value through profit or loss. Such an expectation must be based on an economic relationship between the characteristics of the liability and the characteristics of the other financial instrument.
  2. If a collar, in the form of a purchased call and written put, prevents a transferred asset from being derecognised and the entity measures the asset at fair value, it continues to measure the asset at fair value. The associated liability is measured at (i) the sum of the call exercise price and fair value of the put option less the time value of the call option, if the call option is in or at the money, or (ii) the sum of the fair value of the asset and the fair value of the put option less the time value of the call option if the call option is out of the money. The adjustment to the associated liability ensures that the net carrying amount of the asset and the associated liability is the fair value of the options held and written by the entity. For example, assume an entity transfers a financial asset that is measured at fair value while simultaneously purchasing a call with an exercise price of CU120 and writing a put with an exercise price of CU80. Assume also that the fair value of the asset is CU100 at the date of the transfer. The time value of the put and call are CU1 and CU5 respectively. In this case, the entity recognises an asset of CU100 (the fair value of the asset) and a liability of CU96 [(CU100 + CU1) – CU5]. This gives a net asset value of CU4, which is the fair value of the options held and written by the entity.
  3. If there is a hedging relationship between a non-derivative monetary asset and a non-derivative monetary liability, changes in the foreign currency component of those financial instruments are presented in profit or loss.
  4. As noted in paragraph B4.3.1, when an entity becomes a party to a hybrid contract with a host that is not an asset within the scope of this Standard and with one or more embedded derivatives, paragraph 4.3.3 requires the entity to identify any such embedded derivative, assess whether it is required to be separated from the host contract and, for those that are required to be separated, measure the derivatives at fair value at initial recognition and subsequently. These requirements can be more complex, or result in less reliable measures, than measuring the entire instrument at fair value through profit or loss. For that reason this Standard permits the entire hybrid contract to be designated as at fair value through profit or loss.

*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

NATIONAL WORLD PLC assigned short-term Ba3 & long-term B1 forecasted stock rating. We evaluate the prediction models Modular Neural Network (Financial Sentiment Analysis) with Pearson Correlation1,2,3,4 and conclude that the LON:NWOR 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 Buy LON:NWOR stock.

Financial State Forecast for LON:NWOR NATIONAL WORLD PLC Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*Ba3B1
Operational Risk 6351
Market Risk4852
Technical Analysis9064
Fundamental Analysis7745
Risk Unsystematic5986

Prediction Confidence Score

Trust metric by Neural Network: 81 out of 100 with 535 signals.

References

  1. P. Marbach. Simulated-Based Methods for Markov Decision Processes. PhD thesis, Massachusetts Institute of Technology, 1998
  2. A. Shapiro, W. Tekaya, J. da Costa, and M. Soares. Risk neutral and risk averse stochastic dual dynamic programming method. European journal of operational research, 224(2):375–391, 2013
  3. S. J. Russell and P. Norvig. Artificial Intelligence: A Modern Approach. Prentice Hall, Englewood Cliffs, NJ, 3nd edition, 2010
  4. Miller A. 2002. Subset Selection in Regression. New York: CRC Press
  5. Arjovsky M, Bottou L. 2017. Towards principled methods for training generative adversarial networks. arXiv:1701.04862 [stat.ML]
  6. Varian HR. 2014. Big data: new tricks for econometrics. J. Econ. Perspect. 28:3–28
  7. Athey S, Wager S. 2017. Efficient policy learning. arXiv:1702.02896 [math.ST]
Frequently Asked QuestionsQ: What is the prediction methodology for LON:NWOR stock?
A: LON:NWOR stock prediction methodology: We evaluate the prediction models Modular Neural Network (Financial Sentiment Analysis) and Pearson Correlation
Q: Is LON:NWOR stock a buy or sell?
A: The dominant strategy among neural network is to Buy LON:NWOR Stock.
Q: Is NATIONAL WORLD PLC stock a good investment?
A: The consensus rating for NATIONAL WORLD PLC is Buy and assigned short-term Ba3 & long-term B1 forecasted stock rating.
Q: What is the consensus rating of LON:NWOR stock?
A: The consensus rating for LON:NWOR is Buy.
Q: What is the prediction period for LON:NWOR stock?
A: The prediction period for LON:NWOR is (n+6 month)

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