BAPCOR LIMITED Research Report

## Summary

This paper tries to address the problem of stock market prediction leveraging artificial intelligence (AI) strategies. The stock market prediction can be modeled based on two principal analyses called technical and fundamental. In the technical analysis approach, the regression machine learning (ML) algorithms are employed to predict the stock price trend at the end of a business day based on the historical price data. In contrast, in the fundamental analysis, the classification ML algorithms are applied to classify the public sentiment based on news and social media. We evaluate BAPCOR LIMITED prediction models with Modular Neural Network (CNN Layer) and Chi-Square1,2,3,4 and conclude that the BAP 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 Buy BAP stock.

## Key Points

1. How useful are statistical predictions?
2. Market Signals
3. How do you decide buy or sell a stock?

## BAP Target Price Prediction Modeling Methodology

We consider BAPCOR LIMITED Decision Process with Modular Neural Network (CNN Layer) where A is the set of discrete actions of BAP 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(Chi-Square)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(Modular Neural Network (CNN Layer)) X S(n):→ (n+1 year) $∑ i = 1 n r i$

n:Time series to forecast

p:Price signals of BAP 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?

## BAP Stock Forecast (Buy or Sell) for (n+1 year)

Sample Set: Neural Network
Stock/Index: BAP BAPCOR LIMITED
Time series to forecast n: 01 Dec 2022 for (n+1 year)

According to price forecasts for (n+1 year) period: The dominant strategy among neural network is to Buy BAP 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 BAPCOR LIMITED

1. In some jurisdictions, the government or a regulatory authority sets interest rates. For example, such government regulation of interest rates may be part of a broad macroeconomic policy or it may be introduced to encourage entities to invest in a particular sector of the economy. In some of these cases, the objective of the time value of money element is not to provide consideration for only the passage of time. However, despite paragraphs B4.1.9A–B4.1.9D, a regulated interest rate shall be considered a proxy for the time value of money element for the purpose of applying the condition in paragraphs 4.1.2(b) and 4.1.2A(b) if that regulated interest rate provides consideration that is broadly consistent with the passage of time and does not provide exposure to risks or volatility in the contractual cash flows that are inconsistent with a basic lending arrangement.
2. The accounting for the forward element of forward contracts in accordance with paragraph 6.5.16 applies only to the extent that the forward element relates to the hedged item (aligned forward element). The forward element of a forward contract relates to the hedged item if the critical terms of the forward contract (such as the nominal amount, life and underlying) are aligned with the hedged item. Hence, if the critical terms of the forward contract and the hedged item are not fully aligned, an entity shall determine the aligned forward element, ie how much of the forward element included in the forward contract (actual forward element) relates to the hedged item (and therefore should be treated in accordance with paragraph 6.5.16). An entity determines the aligned forward element using the valuation of the forward contract that would have critical terms that perfectly match the hedged item.
3. The definition of a derivative refers to non-financial variables that are not specific to a party to the contract. These include an index of earthquake losses in a particular region and an index of temperatures in a particular city. Non-financial variables specific to a party to the contract include the occurrence or non-occurrence of a fire that damages or destroys an asset of a party to the contract. A change in the fair value of a non-financial asset is specific to the owner if the fair value reflects not only changes in market prices for such assets (a financial variable) but also the condition of the specific non-financial asset held (a non-financial variable). For example, if a guarantee of the residual value of a specific car exposes the guarantor to the risk of changes in the car's physical condition, the change in that residual value is specific to the owner of the car.
4. Fluctuation around a constant hedge ratio (and hence the related hedge ineffectiveness) cannot be reduced by adjusting the hedge ratio in response to each particular outcome. Hence, in such circumstances, the change in the extent of offset is a matter of measuring and recognising hedge ineffectiveness but does not require rebalancing.

*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

BAPCOR LIMITED assigned short-term B3 & long-term Ba3 forecasted stock rating. We evaluate the prediction models Modular Neural Network (CNN Layer) with Chi-Square1,2,3,4 and conclude that the BAP 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 Buy BAP stock.

### Financial State Forecast for BAP BAPCOR LIMITED Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B3Ba3
Operational Risk 3164
Market Risk6785
Technical Analysis3437
Fundamental Analysis5275
Risk Unsystematic7356

### Prediction Confidence Score

Trust metric by Neural Network: 91 out of 100 with 867 signals.

## References

1. Rosenbaum PR, Rubin DB. 1983. The central role of the propensity score in observational studies for causal effects. Biometrika 70:41–55
2. Angrist JD, Pischke JS. 2008. Mostly Harmless Econometrics: An Empiricist's Companion. Princeton, NJ: Princeton Univ. Press
3. Bennett J, Lanning S. 2007. The Netflix prize. In Proceedings of KDD Cup and Workshop 2007, p. 35. New York: ACM
4. Abadie A, Cattaneo MD. 2018. Econometric methods for program evaluation. Annu. Rev. Econ. 10:465–503
5. Morris CN. 1983. Parametric empirical Bayes inference: theory and applications. J. Am. Stat. Assoc. 78:47–55
6. Varian HR. 2014. Big data: new tricks for econometrics. J. Econ. Perspect. 28:3–28
7. J. Spall. Multivariate stochastic approximation using a simultaneous perturbation gradient approximation. IEEE Transactions on Automatic Control, 37(3):332–341, 1992.
Frequently Asked QuestionsQ: What is the prediction methodology for BAP stock?
A: BAP stock prediction methodology: We evaluate the prediction models Modular Neural Network (CNN Layer) and Chi-Square
Q: Is BAP stock a buy or sell?
A: The dominant strategy among neural network is to Buy BAP Stock.
Q: Is BAPCOR LIMITED stock a good investment?
A: The consensus rating for BAPCOR LIMITED is Buy and assigned short-term B3 & long-term Ba3 forecasted stock rating.
Q: What is the consensus rating of BAP stock?
A: The consensus rating for BAP is Buy.
Q: What is the prediction period for BAP stock?
A: The prediction period for BAP is (n+1 year)