Can neural networks predict stock market? (CHDN Stock Forecast)

Neural networks, as an intelligent data mining method, have been used in many different challenging pattern recognition problems such as stock market prediction. However, there is no formal method to determine the optimal neural network for prediction purpose in the literature. In this paper, two kinds of neural networks, a feed forward multi layer Perceptron (MLP) and an Elman recurrent network, are used to predict a company's stock value based on its stock share value history. We evaluate Churchill Downs Inc prediction models with Modular Neural Network (Market News Sentiment Analysis) and Wilcoxon Sign-Rank Test1,2,3,4 and conclude that the CHDN stock is predictable in the short/long term. According to price forecasts for (n+16 weeks) period: The dominant strategy among neural network is to Hold CHDN stock.


Keywords: CHDN, Churchill Downs Inc, stock forecast, machine learning based prediction, risk rating, buy-sell behaviour, stock analysis, target price analysis, options and futures.

Key Points

  1. Can statistics predict the future?
  2. What is a prediction confidence?
  3. What is statistical models in machine learning?

CHDN Target Price Prediction Modeling Methodology

Stock market forecasting is considered to be a challenging topic among time series forecasting. This study proposes a novel two-stage ensemble machine learning model named SVR-ENANFIS for stock price prediction by combining features of support vector regression (SVR) and ensemble adaptive neuro fuzzy inference system (ENANFIS). We consider Churchill Downs Inc Stock Decision Process with Wilcoxon Sign-Rank Test where A is the set of discrete actions of CHDN 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(Modular Neural Network (Market News Sentiment Analysis)) X S(n):→ (n+16 weeks) i = 1 n a i

n:Time series to forecast

p:Price signals of CHDN 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?

CHDN Stock Forecast (Buy or Sell) for (n+16 weeks)


Sample Set: Neural Network
Stock/Index: CHDN Churchill Downs Inc
Time series to forecast n: 12 Nov 2022 for (n+16 weeks)

According to price forecasts for (n+16 weeks) period: The dominant strategy among neural network is to Hold CHDN 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 Churchill Downs Inc

  1. If a guarantee provided by an entity to pay for default losses on a transferred asset prevents the transferred asset from being derecognised to the extent of the continuing involvement, the transferred asset at the date of the transfer is measured at the lower of (i) the carrying amount of the asset and (ii) the maximum amount of the consideration received in the transfer that the entity could be required to repay ('the guarantee amount'). The associated liability is initially measured at the guarantee amount plus the fair value of the guarantee (which is normally the consideration received for the guarantee). Subsequently, the initial fair value of the guarantee is recognised in profit or loss when (or as) the obligation is satisfied (in accordance with the principles of IFRS 15) and the carrying value of the asset is reduced by any loss allowance.
  2. 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.
  3. For a financial guarantee contract, the entity is required to make payments only in the event of a default by the debtor in accordance with the terms of the instrument that is guaranteed. Accordingly, cash shortfalls are the expected payments to reimburse the holder for a credit loss that it incurs less any amounts that the entity expects to receive from the holder, the debtor or any other party. If the asset is fully guaranteed, the estimation of cash shortfalls for a financial guarantee contract would be consistent with the estimations of cash shortfalls for the asset subject to the guarantee
  4. An entity shall assess separately whether each subgroup meets the requirements in paragraph 6.6.1 to be an eligible hedged item. If any subgroup fails to meet the requirements in paragraph 6.6.1, the entity shall discontinue hedge accounting prospectively for the hedging relationship in its entirety. An entity also shall apply the requirements in paragraphs 6.5.8 and 6.5.11 to account for ineffectiveness related to the hedging relationship in its entirety.

*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

Churchill Downs Inc assigned short-term B1 & long-term B2 forecasted stock rating. We evaluate the prediction models Modular Neural Network (Market News Sentiment Analysis) with Wilcoxon Sign-Rank Test1,2,3,4 and conclude that the CHDN stock is predictable in the short/long term. According to price forecasts for (n+16 weeks) period: The dominant strategy among neural network is to Hold CHDN stock.

Financial State Forecast for CHDN Churchill Downs Inc Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B1B2
Operational Risk 8335
Market Risk6857
Technical Analysis8775
Fundamental Analysis3439
Risk Unsystematic3037

Prediction Confidence Score

Trust metric by Neural Network: 74 out of 100 with 544 signals.

References

  1. Chen X. 2007. Large sample sieve estimation of semi-nonparametric models. In Handbook of Econometrics, Vol. 6B, ed. JJ Heckman, EE Learner, pp. 5549–632. Amsterdam: Elsevier
  2. Clements, M. P. D. F. Hendry (1996), "Intercept corrections and structural change," Journal of Applied Econometrics, 11, 475–494.
  3. Bai J, Ng S. 2002. Determining the number of factors in approximate factor models. Econometrica 70:191–221
  4. Akgiray, V. (1989), "Conditional heteroscedasticity in time series of stock returns: Evidence and forecasts," Journal of Business, 62, 55–80.
  5. Brailsford, T.J. R.W. Faff (1996), "An evaluation of volatility forecasting techniques," Journal of Banking Finance, 20, 419–438.
  6. E. Altman. Constrained Markov decision processes, volume 7. CRC Press, 1999
  7. Varian HR. 2014. Big data: new tricks for econometrics. J. Econ. Perspect. 28:3–28
Frequently Asked QuestionsQ: What is the prediction methodology for CHDN stock?
A: CHDN stock prediction methodology: We evaluate the prediction models Modular Neural Network (Market News Sentiment Analysis) and Wilcoxon Sign-Rank Test
Q: Is CHDN stock a buy or sell?
A: The dominant strategy among neural network is to Hold CHDN Stock.
Q: Is Churchill Downs Inc stock a good investment?
A: The consensus rating for Churchill Downs Inc is Hold and assigned short-term B1 & long-term B2 forecasted stock rating.
Q: What is the consensus rating of CHDN stock?
A: The consensus rating for CHDN is Hold.
Q: What is the prediction period for CHDN stock?
A: The prediction period for CHDN is (n+16 weeks)

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