Modelling A.I. in Economics

What are the most successful trading algorithms? (LON:XPS Stock Forecast)

Recently, there has been a surge of interest in the use of machine learning to help aid in the accurate predictions of financial markets. Despite the exciting advances in this cross-section of finance and AI, many of the current approaches are limited to using technical analysis to capture historical trends of each stock price and thus limited to certain experimental setups to obtain good prediction results. On the other hand, professional investors additionally use their rich knowledge of inter-market and inter-company relations to map the connectivity of companies and events, and use this map to make better market predictions. For instance, they would predict the movement of a certain company's stock price based not only on its former stock price trends but also on the performance of its suppliers or customers, the overall industry, macroeconomic factors and trade policies. This paper investigates the effectiveness of work at the intersection of market predictions and graph neural networks, which hold the potential to mimic the ways in which investors make decisions by incorporating company knowledge graphs directly into the predictive model. We evaluate XPS PENSIONS GROUP PLC prediction models with Modular Neural Network (Market Direction Analysis) and Wilcoxon Rank-Sum Test1,2,3,4 and conclude that the LON:XPS stock is predictable in the short/long term. According to price forecasts for (n+1 year) period: The dominant strategy among neural network is to Hold LON:XPS stock.


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

Key Points

  1. Prediction Modeling
  2. What is statistical models in machine learning?
  3. How do predictive algorithms actually work?

LON:XPS Target Price Prediction Modeling Methodology

Prediction of the Stock Market is a challenging task in predicting the stock prices in the future. Due to the fluctuating nature of the stock, the stock market is too difficult to predict. Stock prices are constantly changing every day. Estimating of the stock market has a high demand for stock customers. Applying all extracted rules at any time is a major challenge to estimate the future stock price with high accuracy. The latest prediction techniques adopted for the stock market such as Artificial Neural Network, Neuro-Fuzzy System, Time Series Linear Models (TSLM), Recurrent Neural Network (RNN). We consider XPS PENSIONS GROUP PLC Stock Decision Process with Wilcoxon Rank-Sum Test where A is the set of discrete actions of LON:XPS 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 Direction Analysis)) X S(n):→ (n+1 year) R = 1 0 0 0 1 0 0 0 1

n:Time series to forecast

p:Price signals of LON:XPS 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:XPS Stock Forecast (Buy or Sell) for (n+1 year)

Sample Set: Neural Network
Stock/Index: LON:XPS XPS PENSIONS GROUP PLC
Time series to forecast n: 30 Oct 2022 for (n+1 year)

According to price forecasts for (n+1 year) period: The dominant strategy among neural network is to Hold LON:XPS 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 XPS PENSIONS GROUP PLC

  1. A similar example of a non-financial item is a specific type of crude oil from a particular oil field that is priced off the relevant benchmark crude oil. If an entity sells that crude oil under a contract using a contractual pricing formula that sets the price per barrel at the benchmark crude oil price minus CU10 with a floor of CU15, the entity can designate as the hedged item the entire cash flow variability under the sales contract that is attributable to the change in the benchmark crude oil price. However, the entity cannot designate a component that is equal to the full change in the benchmark crude oil price. Hence, as long as the forward price (for each delivery) does not fall below CU25, the hedged item has the same cash flow variability as a crude oil sale at the benchmark crude oil price (or with a positive spread). However, if the forward price for any delivery falls below CU25, the hedged item has a lower cash flow variability than a crude oil sale at the benchmark crude oil price (or with a positive spread).
  2. For example, an entity may use this condition to designate financial liabilities as at fair value through profit or loss if it meets the principle in paragraph 4.2.2(b) and the entity has financial assets and financial liabilities that share one or more risks and those risks are managed and evaluated on a fair value basis in accordance with a documented policy of asset and liability management. An example could be an entity that has issued 'structured products' containing multiple embedded derivatives and manages the resulting risks on a fair value basis using a mix of derivative and non-derivative financial instruments
  3. When using historical credit loss experience in estimating expected credit losses, it is important that information about historical credit loss rates is applied to groups that are defined in a manner that is consistent with the groups for which the historical credit loss rates were observed. Consequently, the method used shall enable each group of financial assets to be associated with information about past credit loss experience in groups of financial assets with similar risk characteristics and with relevant observable data that reflects current conditions.
  4. An entity may manage and evaluate the performance of a group of financial liabilities or financial assets and financial liabilities in such a way that measuring that group at fair value through profit or loss results in more relevant information. The focus in this instance is on the way the entity manages and evaluates performance, instead of on the nature of its financial instruments.

*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

XPS PENSIONS GROUP PLC assigned short-term B3 & long-term B2 forecasted stock rating. We evaluate the prediction models Modular Neural Network (Market Direction Analysis) with Wilcoxon Rank-Sum Test1,2,3,4 and conclude that the LON:XPS stock is predictable in the short/long term. According to price forecasts for (n+1 year) period: The dominant strategy among neural network is to Hold LON:XPS stock.

Financial State Forecast for LON:XPS XPS PENSIONS GROUP PLC Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B3B2
Operational Risk 4439
Market Risk4638
Technical Analysis7742
Fundamental Analysis3064
Risk Unsystematic6259

Prediction Confidence Score

Trust metric by Neural Network: 87 out of 100 with 683 signals.

References

  1. Bewley, R. M. Yang (1998), "On the size and power of system tests for cointegration," Review of Economics and Statistics, 80, 675–679.
  2. M. L. Littman. Friend-or-foe q-learning in general-sum games. In Proceedings of the Eighteenth International Conference on Machine Learning (ICML 2001), Williams College, Williamstown, MA, USA, June 28 - July 1, 2001, pages 322–328, 2001
  3. Athey S. 2017. Beyond prediction: using big data for policy problems. Science 355:483–85
  4. K. Tumer and D. Wolpert. A survey of collectives. In K. Tumer and D. Wolpert, editors, Collectives and the Design of Complex Systems, pages 1–42. Springer, 2004.
  5. Bai J, Ng S. 2002. Determining the number of factors in approximate factor models. Econometrica 70:191–221
  6. Athey S, Bayati M, Doudchenko N, Imbens G, Khosravi K. 2017a. Matrix completion methods for causal panel data models. arXiv:1710.10251 [math.ST]
  7. Semenova V, Goldman M, Chernozhukov V, Taddy M. 2018. Orthogonal ML for demand estimation: high dimensional causal inference in dynamic panels. arXiv:1712.09988 [stat.ML]
Frequently Asked QuestionsQ: What is the prediction methodology for LON:XPS stock?
A: LON:XPS stock prediction methodology: We evaluate the prediction models Modular Neural Network (Market Direction Analysis) and Wilcoxon Rank-Sum Test
Q: Is LON:XPS stock a buy or sell?
A: The dominant strategy among neural network is to Hold LON:XPS Stock.
Q: Is XPS PENSIONS GROUP PLC stock a good investment?
A: The consensus rating for XPS PENSIONS GROUP PLC is Hold and assigned short-term B3 & long-term B2 forecasted stock rating.
Q: What is the consensus rating of LON:XPS stock?
A: The consensus rating for LON:XPS is Hold.
Q: What is the prediction period for LON:XPS stock?
A: The prediction period for LON:XPS is (n+1 year)

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