Modelling A.I. in Economics

Buy, Sell, or Hold? (LON:REDC Stock Forecast) (Forecast)

Predicting stock index with traditional time series analysis has proven to be difficult an Artificial Neural network may be suitable for the task. A Neural Network has the ability to extract useful information from large set of data. This paper presents a review of literature application of Artificial Neural Network for stock market predictions and from this literature found that Artificial Neural Network is very useful for predicting world stock markets. We evaluate RED CAPITAL PLC prediction models with Modular Neural Network (Emotional Trigger/Responses Analysis) and Polynomial Regression1,2,3,4 and conclude that the LON:REDC stock is predictable in the short/long term. According to price forecasts for (n+4 weeks) period: The dominant strategy among neural network is to Hold LON:REDC stock.


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

Key Points

  1. Trust metric by Neural Network
  2. What is statistical models in machine learning?
  3. What is statistical models in machine learning?

LON:REDC Target Price Prediction Modeling Methodology

Stock index price prediction is prevalent in both academic and economic fields. The index price is hard to forecast due to its uncertain noise. With the development of computer science, neural networks are applied in kinds of industrial fields. In this paper, we introduce four different methods in machine learning including three typical machine learning models: Multilayer Perceptron (MLP), Long Short Term Memory (LSTM) and Convolutional Neural Network (CNN) and one attention-based neural network. We consider RED CAPITAL PLC Stock Decision Process with Polynomial Regression where A is the set of discrete actions of LON:REDC 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(Polynomial 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 (Emotional Trigger/Responses Analysis)) X S(n):→ (n+4 weeks) R = 1 0 0 0 1 0 0 0 1

n:Time series to forecast

p:Price signals of LON:REDC 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:REDC Stock Forecast (Buy or Sell) for (n+4 weeks)


Sample Set: Neural Network
Stock/Index: LON:REDC RED CAPITAL PLC
Time series to forecast n: 09 Nov 2022 for (n+4 weeks)

According to price forecasts for (n+4 weeks) period: The dominant strategy among neural network is to Hold LON:REDC 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 RED CAPITAL PLC

  1. 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.
  2. The business model may be to hold assets to collect contractual cash flows even if the entity sells financial assets when there is an increase in the assets' credit risk. To determine whether there has been an increase in the assets' credit risk, the entity considers reasonable and supportable information, including forward looking information. Irrespective of their frequency and value, sales due to an increase in the assets' credit risk are not inconsistent with a business model whose objective is to hold financial assets to collect contractual cash flows because the credit quality of financial assets is relevant to the entity's ability to collect contractual cash flows. Credit risk management activities that are aimed at minimising potential credit losses due to credit deterioration are integral to such a business model. Selling a financial asset because it no longer meets the credit criteria specified in the entity's documented investment policy is an example of a sale that has occurred due to an increase in credit risk. However, in the absence of such a policy, the entity may demonstrate in other ways that the sale occurred due to an increase in credit risk.
  3. The purpose of estimating expected credit losses is neither to estimate a worstcase scenario nor to estimate the best-case scenario. Instead, an estimate of expected credit losses shall always reflect the possibility that a credit loss occurs and the possibility that no credit loss occurs even if the most likely outcome is no credit loss.
  4. Hedge effectiveness is the extent to which changes in the fair value or the cash flows of the hedging instrument offset changes in the fair value or the cash flows of the hedged item (for example, when the hedged item is a risk component, the relevant change in fair value or cash flows of an item is the one that is attributable to the hedged risk). Hedge ineffectiveness is the extent to which the changes in the fair value or the cash flows of the hedging instrument are greater or less than those on the hedged item.

*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

RED CAPITAL PLC assigned short-term Baa2 & long-term Ba3 forecasted stock rating. We evaluate the prediction models Modular Neural Network (Emotional Trigger/Responses Analysis) with Polynomial Regression1,2,3,4 and conclude that the LON:REDC stock is predictable in the short/long term. According to price forecasts for (n+4 weeks) period: The dominant strategy among neural network is to Hold LON:REDC stock.

Financial State Forecast for LON:REDC RED CAPITAL PLC Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*Baa2Ba3
Operational Risk 9055
Market Risk8764
Technical Analysis8578
Fundamental Analysis8565
Risk Unsystematic6445

Prediction Confidence Score

Trust metric by Neural Network: 85 out of 100 with 639 signals.

References

  1. T. Morimura, M. Sugiyama, M. Kashima, H. Hachiya, and T. Tanaka. Nonparametric return distribution ap- proximation for reinforcement learning. In Proceedings of the 27th International Conference on Machine Learning, pages 799–806, 2010
  2. K. Boda and J. Filar. Time consistent dynamic risk measures. Mathematical Methods of Operations Research, 63(1):169–186, 2006
  3. Abadie A, Cattaneo MD. 2018. Econometric methods for program evaluation. Annu. Rev. Econ. 10:465–503
  4. Imai K, Ratkovic M. 2013. Estimating treatment effect heterogeneity in randomized program evaluation. Ann. Appl. Stat. 7:443–70
  5. D. S. Bernstein, S. Zilberstein, and N. Immerman. The complexity of decentralized control of Markov Decision Processes. In UAI '00: Proceedings of the 16th Conference in Uncertainty in Artificial Intelligence, Stanford University, Stanford, California, USA, June 30 - July 3, 2000, pages 32–37, 2000.
  6. Pennington J, Socher R, Manning CD. 2014. GloVe: global vectors for word representation. In Proceedings of the 2014 Conference on Empirical Methods on Natural Language Processing, pp. 1532–43. New York: Assoc. Comput. Linguist.
  7. Challen, D. W. A. J. Hagger (1983), Macroeconomic Systems: Construction, Validation and Applications. New York: St. Martin's Press.
Frequently Asked QuestionsQ: What is the prediction methodology for LON:REDC stock?
A: LON:REDC stock prediction methodology: We evaluate the prediction models Modular Neural Network (Emotional Trigger/Responses Analysis) and Polynomial Regression
Q: Is LON:REDC stock a buy or sell?
A: The dominant strategy among neural network is to Hold LON:REDC Stock.
Q: Is RED CAPITAL PLC stock a good investment?
A: The consensus rating for RED CAPITAL PLC is Hold and assigned short-term Baa2 & long-term Ba3 forecasted stock rating.
Q: What is the consensus rating of LON:REDC stock?
A: The consensus rating for LON:REDC is Hold.
Q: What is the prediction period for LON:REDC stock?
A: The prediction period for LON:REDC is (n+4 weeks)

Premium

  • Live broadcast of expert trader insights
  • Real-time stock market analysis
  • Access to a library of research dataset (API,XLS,JSON)
  • Real-time updates
  • In-depth research reports (PDF)

Login
This project is licensed under the license; additional terms may apply.