Alcon Inc. Ordinary Shares Research Report

## Summary

Neural networks (NNs), as artificial intelligence (AI) methods, have become very important in making stock market predictions. Much research on the applications of NNs for solving business problems have proven their advantages over statistical and other methods that do not include AI, although there is no optimal methodology for a certain problem. We evaluate Alcon Inc. Ordinary Shares prediction models with Supervised Machine Learning (ML) and Stepwise Regression1,2,3,4 and conclude that the ALC 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 ALC stock.

## Key Points

1. Buy, Sell and Hold Signals
2. How do predictive algorithms actually work?
3. How accurate is machine learning in stock market?

## ALC Target Price Prediction Modeling Methodology

We consider Alcon Inc. Ordinary Shares Decision Process with Supervised Machine Learning (ML) where A is the set of discrete actions of ALC 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(Stepwise Regression)5,6,7= $\begin{array}{cccc}{p}_{a1}& {p}_{a2}& \dots & {p}_{1n}\\ & ⋮\\ {p}_{j1}& {p}_{j2}& \dots & {p}_{jn}\\ & ⋮\\ {p}_{k1}& {p}_{k2}& \dots & {p}_{kn}\\ & ⋮\\ {p}_{n1}& {p}_{n2}& \dots & {p}_{nn}\end{array}$ X R(Supervised Machine Learning (ML)) X S(n):→ (n+8 weeks) $\stackrel{\to }{S}=\left({s}_{1},{s}_{2},{s}_{3}\right)$

n:Time series to forecast

p:Price signals of ALC stock

j:Nash equilibria (Neural Network)

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?

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

Sample Set: Neural Network
Stock/Index: ALC Alcon Inc. Ordinary Shares
Time series to forecast n: 30 Nov 2022 for (n+8 weeks)

According to price forecasts for (n+8 weeks) period: The dominant strategy among neural network is to Hold ALC 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 Alcon Inc. Ordinary Shares

1. For example, an entity hedges an exposure to Foreign Currency A using a currency derivative that references Foreign Currency B and Foreign Currencies A and B are pegged (ie their exchange rate is maintained within a band or at an exchange rate set by a central bank or other authority). If the exchange rate between Foreign Currency A and Foreign Currency B were changed (ie a new band or rate was set), rebalancing the hedging relationship to reflect the new exchange rate would ensure that the hedging relationship would continue to meet the hedge effectiveness requirement for the hedge ratio in the new circumstances. In contrast, if there was a default on the currency derivative, changing the hedge ratio could not ensure that the hedging relationship would continue to meet that hedge effectiveness requirement. Hence, rebalancing does not facilitate the continuation of a hedging relationship in situations in which the relationship between the hedging instrument and the hedged item changes in a way that cannot be compensated for by adjusting the hedge ratio
2. An entity has not retained control of a transferred asset if the transferee has the practical ability to sell the transferred asset. An entity has retained control of a transferred asset if the transferee does not have the practical ability to sell the transferred asset. A transferee has the practical ability to sell the transferred asset if it is traded in an active market because the transferee could repurchase the transferred asset in the market if it needs to return the asset to the entity. For example, a transferee may have the practical ability to sell a transferred asset if the transferred asset is subject to an option that allows the entity to repurchase it, but the transferee can readily obtain the transferred asset in the market if the option is exercised. A transferee does not have the practical ability to sell the transferred asset if the entity retains such an option and the transferee cannot readily obtain the transferred asset in the market if the entity exercises its option
3. For the purpose of recognising foreign exchange gains and losses under IAS 21, a financial asset measured at fair value through other comprehensive income in accordance with paragraph 4.1.2A is treated as a monetary item. Accordingly, such a financial asset is treated as an asset measured at amortised cost in the foreign currency. Exchange differences on the amortised cost are recognised in profit or loss and other changes in the carrying amount are recognised in accordance with paragraph 5.7.10.
4. An entity's estimate of expected credit losses on loan commitments shall be consistent with its expectations of drawdowns on that loan commitment, ie it shall consider the expected portion of the loan commitment that will be drawn down within 12 months of the reporting date when estimating 12-month expected credit losses, and the expected portion of the loan commitment that will be drawn down over the expected life of the loan commitment when estimating lifetime expected credit losses.

*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

Alcon Inc. Ordinary Shares assigned short-term Caa2 & long-term B1 forecasted stock rating. We evaluate the prediction models Supervised Machine Learning (ML) with Stepwise Regression1,2,3,4 and conclude that the ALC 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 ALC stock.

### Financial State Forecast for ALC Alcon Inc. Ordinary Shares Options & Futures

Rating Short-Term Long-Term Senior
Outlook*Caa2B1
Operational Risk 3653
Market Risk3133
Technical Analysis6638
Fundamental Analysis5568
Risk Unsystematic3387

### Prediction Confidence Score

Trust metric by Neural Network: 87 out of 100 with 743 signals.

## References

1. V. Borkar. Q-learning for risk-sensitive control. Mathematics of Operations Research, 27:294–311, 2002.
2. Vapnik V. 2013. The Nature of Statistical Learning Theory. Berlin: Springer
3. Candès E, Tao T. 2007. The Dantzig selector: statistical estimation when p is much larger than n. Ann. Stat. 35:2313–51
4. Artis, M. J. W. Zhang (1990), "BVAR forecasts for the G-7," International Journal of Forecasting, 6, 349–362.
5. Byron, R. P. O. Ashenfelter (1995), "Predicting the quality of an unborn grange," Economic Record, 71, 40–53.
6. P. Marbach. Simulated-Based Methods for Markov Decision Processes. PhD thesis, Massachusetts Institute of Technology, 1998
7. R. Williams. Simple statistical gradient-following algorithms for connectionist reinforcement learning. Ma- chine learning, 8(3-4):229–256, 1992
Frequently Asked QuestionsQ: What is the prediction methodology for ALC stock?
A: ALC stock prediction methodology: We evaluate the prediction models Supervised Machine Learning (ML) and Stepwise Regression
Q: Is ALC stock a buy or sell?
A: The dominant strategy among neural network is to Hold ALC Stock.
Q: Is Alcon Inc. Ordinary Shares stock a good investment?
A: The consensus rating for Alcon Inc. Ordinary Shares is Hold and assigned short-term Caa2 & long-term B1 forecasted stock rating.
Q: What is the consensus rating of ALC stock?
A: The consensus rating for ALC is Hold.
Q: What is the prediction period for ALC stock?
A: The prediction period for ALC is (n+8 weeks)