Modelling A.I. in Economics

Buy, Sell, or Hold? (SEE 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 Sealed Air prediction models with Reinforcement Machine Learning (ML) and Wilcoxon Sign-Rank Test1,2,3,4 and conclude that the SEE 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 Buy SEE stock.


Keywords: SEE, Sealed Air, stock forecast, machine learning based prediction, risk rating, buy-sell behaviour, stock analysis, target price analysis, options and futures.

Key Points

  1. What is neural prediction?
  2. What is the use of Markov decision process?
  3. Is it better to buy and sell or hold?

SEE Target Price Prediction Modeling Methodology

Understanding the pattern of financial activities and predicting their development and changes are research hotspots in academic and financial circles. Because financial data contain complex, incomplete and fuzzy information, predicting their development trends is an extremely difficult challenge. Fluctuations in financial data depend on a myriad of correlated constantly changing factors. Therefore, predicting and analysing financial data are a nonlinear, time-dependent problem. Deep neural networks (DNNs) combine the advantages of deep learning (DL) and neural networks and can be used to solve nonlinear problems more satisfactorily compared to conventional machine learning algorithms. We consider Sealed Air Stock Decision Process with Wilcoxon Sign-Rank Test where A is the set of discrete actions of SEE 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 Sign-Rank 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(Reinforcement Machine Learning (ML)) X S(n):→ (n+8 weeks) R = r 1 r 2 r 3

n:Time series to forecast

p:Price signals of SEE 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?

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

Sample Set: Neural Network
Stock/Index: SEE Sealed Air
Time series to forecast n: 15 Nov 2022 for (n+8 weeks)

According to price forecasts for (n+8 weeks) period: The dominant strategy among neural network is to Buy SEE 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 Sealed Air

  1. IFRS 7 defines credit risk as 'the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation'. The requirement in paragraph 5.7.7(a) relates to the risk that the issuer will fail to perform on that particular liability. It does not necessarily relate to the creditworthiness of the issuer. For example, if an entity issues a collateralised liability and a non-collateralised liability that are otherwise identical, the credit risk of those two liabilities will be different, even though they are issued by the same entity. The credit risk on the collateralised liability will be less than the credit risk of the non-collateralised liability. The credit risk for a collateralised liability may be close to zero.
  2. An equity method investment cannot be a hedged item in a fair value hedge. This is because the equity method recognises in profit or loss the investor's share of the investee's profit or loss, instead of changes in the investment's fair value. For a similar reason, an investment in a consolidated subsidiary cannot be a hedged item in a fair value hedge. This is because consolidation recognises in profit or loss the subsidiary's profit or loss, instead of changes in the investment's fair value. A hedge of a net investment in a foreign operation is different because it is a hedge of the foreign currency exposure, not a fair value hedge of the change in the value of the investment.
  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. As with all fair value measurements, an entity's measurement method for determining the portion of the change in the liability's fair value that is attributable to changes in its credit risk must make maximum use of relevant observable inputs and minimum use of unobservable inputs.

*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

Sealed Air assigned short-term Baa2 & long-term Ba2 forecasted stock rating. We evaluate the prediction models Reinforcement Machine Learning (ML) with Wilcoxon Sign-Rank Test1,2,3,4 and conclude that the SEE 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 Buy SEE stock.

Financial State Forecast for SEE Sealed Air Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*Baa2Ba2
Operational Risk 8885
Market Risk5984
Technical Analysis8877
Fundamental Analysis7250
Risk Unsystematic7145

Prediction Confidence Score

Trust metric by Neural Network: 83 out of 100 with 705 signals.

References

  1. M. L. Littman. Markov games as a framework for multi-agent reinforcement learning. In Ma- chine Learning, Proceedings of the Eleventh International Conference, Rutgers University, New Brunswick, NJ, USA, July 10-13, 1994, pages 157–163, 1994
  2. Wooldridge JM. 2010. Econometric Analysis of Cross Section and Panel Data. Cambridge, MA: MIT Press
  3. Bessler, D. A. S. W. Fuller (1993), "Cointegration between U.S. wheat markets," Journal of Regional Science, 33, 481–501.
  4. Cheung, Y. M.D. Chinn (1997), "Further investigation of the uncertain unit root in GNP," Journal of Business and Economic Statistics, 15, 68–73.
  5. Ruiz FJ, Athey S, Blei DM. 2017. SHOPPER: a probabilistic model of consumer choice with substitutes and complements. arXiv:1711.03560 [stat.ML]
  6. K. Boda, J. Filar, Y. Lin, and L. Spanjers. Stochastic target hitting time and the problem of early retirement. Automatic Control, IEEE Transactions on, 49(3):409–419, 2004
  7. Alexander, J. C. Jr. (1995), "Refining the degree of earnings surprise: A comparison of statistical and analysts' forecasts," Financial Review, 30, 469–506.
Frequently Asked QuestionsQ: What is the prediction methodology for SEE stock?
A: SEE stock prediction methodology: We evaluate the prediction models Reinforcement Machine Learning (ML) and Wilcoxon Sign-Rank Test
Q: Is SEE stock a buy or sell?
A: The dominant strategy among neural network is to Buy SEE Stock.
Q: Is Sealed Air stock a good investment?
A: The consensus rating for Sealed Air is Buy and assigned short-term Baa2 & long-term Ba2 forecasted stock rating.
Q: What is the consensus rating of SEE stock?
A: The consensus rating for SEE is Buy.
Q: What is the prediction period for SEE stock?
A: The prediction period for SEE is (n+8 weeks)

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