Modelling A.I. in Economics

Can stock prices be predicted? (Nikkei 225 Index Stock Forecast) (Forecast)

Machine learning addresses the question of how to build computers that improve automatically through experience. It is one of today's most rapidly growing technical fields, lying at the intersection of computer science and statistics, and at the core of artificial intelligence and data science. We evaluate Nikkei 225 Index prediction models with Modular Neural Network (Market News Sentiment Analysis) and Paired T-Test1,2,3,4 and conclude that the Nikkei 225 Index stock is predictable in the short/long term. According to price forecasts for (n+6 month) period: The dominant strategy among neural network is to Hold Nikkei 225 Index stock.

Key Points

  1. Trust metric by Neural Network
  2. Understanding Buy, Sell, and Hold Ratings
  3. How do you pick a stock?

Nikkei 225 Index Target Price Prediction Modeling Methodology

Predicting stock market prices is crucial subject at the present economy. Hence, the tendency of researchers towards new opportunities to predict the stock market has been increased. Researchers have found that, historical stock data and Search Engine Queries, social mood from user generated content in sources like Twitter, Web News has a predictive relationship to the future stock prices. Lack of information such as social mood was there in past studies and in this research, we discuss an effective method to analyze multiple information sources to fill the information gap and predict an accurate future value. We consider Nikkei 225 Index Stock Decision Process with Paired T-Test where A is the set of discrete actions of Nikkei 225 Index 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(Paired T-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+6 month) R = 1 0 0 0 1 0 0 0 1

n:Time series to forecast

p:Price signals of Nikkei 225 Index 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?

Nikkei 225 Index Stock Forecast (Buy or Sell) for (n+6 month)

Sample Set: Neural Network
Stock/Index: Nikkei 225 Index Nikkei 225 Index
Time series to forecast n: 17 Nov 2022 for (n+6 month)

According to price forecasts for (n+6 month) period: The dominant strategy among neural network is to Hold Nikkei 225 Index 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 Nikkei 225 Index

  1. Interest Rate Benchmark Reform—Phase 2, which amended IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, issued in August 2020, added paragraphs 5.4.5–5.4.9, 6.8.13, Section 6.9 and paragraphs 7.2.43–7.2.46. An entity shall apply these amendments for annual periods beginning on or after 1 January 2021. Earlier application is permitted. If an entity applies these amendments for an earlier period, it shall disclose that fact.
  2. A firm commitment to acquire a business in a business combination cannot be a hedged item, except for foreign currency risk, because the other risks being hedged cannot be specifically identified and measured. Those other risks are general business risks.
  3. For the purpose of this Standard, reasonable and supportable information is that which is reasonably available at the reporting date without undue cost or effort, including information about past events, current conditions and forecasts of future economic conditions. Information that is available for financial reporting purposes is considered to be available without undue cost or effort.
  4. In accordance with the hedge effectiveness requirements, the hedge ratio of the hedging relationship must be the same as that resulting from the quantity of the hedged item that the entity actually hedges and the quantity of the hedging instrument that the entity actually uses to hedge that quantity of hedged item. Hence, if an entity hedges less than 100 per cent of the exposure on an item, such as 85 per cent, it shall designate the hedging relationship using a hedge ratio that is the same as that resulting from 85 per cent of the exposure and the quantity of the hedging instrument that the entity actually uses to hedge those 85 per cent. Similarly, if, for example, an entity hedges an exposure using a nominal amount of 40 units of a financial instrument, it shall designate the hedging relationship using a hedge ratio that is the same as that resulting from that quantity of 40 units (ie the entity must not use a hedge ratio based on a higher quantity of units that it might hold in total or a lower quantity of units) and the quantity of the hedged item that it actually hedges with those 40 units.

*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

Nikkei 225 Index assigned short-term Ba3 & long-term Ba3 forecasted stock rating. We evaluate the prediction models Modular Neural Network (Market News Sentiment Analysis) with Paired T-Test1,2,3,4 and conclude that the Nikkei 225 Index stock is predictable in the short/long term. According to price forecasts for (n+6 month) period: The dominant strategy among neural network is to Hold Nikkei 225 Index stock.

Financial State Forecast for Nikkei 225 Index Nikkei 225 Index Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*Ba3Ba3
Operational Risk 4888
Market Risk7742
Technical Analysis7555
Fundamental Analysis6655
Risk Unsystematic6972

Prediction Confidence Score

Trust metric by Neural Network: 86 out of 100 with 807 signals.

References

  1. M. Babes, E. M. de Cote, and M. L. Littman. Social reward shaping in the prisoner's dilemma. In 7th International Joint Conference on Autonomous Agents and Multiagent Systems (AAMAS 2008), Estoril, Portugal, May 12-16, 2008, Volume 3, pages 1389–1392, 2008.
  2. Mazumder R, Hastie T, Tibshirani R. 2010. Spectral regularization algorithms for learning large incomplete matrices. J. Mach. Learn. Res. 11:2287–322
  3. A. Y. Ng, D. Harada, and S. J. Russell. Policy invariance under reward transformations: Theory and application to reward shaping. In Proceedings of the Sixteenth International Conference on Machine Learning (ICML 1999), Bled, Slovenia, June 27 - 30, 1999, pages 278–287, 1999.
  4. L. Busoniu, R. Babuska, and B. D. Schutter. A comprehensive survey of multiagent reinforcement learning. IEEE Transactions of Systems, Man, and Cybernetics Part C: Applications and Reviews, 38(2), 2008.
  5. D. Bertsekas and J. Tsitsiklis. Neuro-dynamic programming. Athena Scientific, 1996.
  6. Mnih A, Kavukcuoglu K. 2013. Learning word embeddings efficiently with noise-contrastive estimation. In Advances in Neural Information Processing Systems, Vol. 26, ed. Z Ghahramani, M Welling, C Cortes, ND Lawrence, KQ Weinberger, pp. 2265–73. San Diego, CA: Neural Inf. Process. Syst. Found.
  7. R. Sutton and A. Barto. Introduction to reinforcement learning. MIT Press, 1998
Frequently Asked QuestionsQ: What is the prediction methodology for Nikkei 225 Index stock?
A: Nikkei 225 Index stock prediction methodology: We evaluate the prediction models Modular Neural Network (Market News Sentiment Analysis) and Paired T-Test
Q: Is Nikkei 225 Index stock a buy or sell?
A: The dominant strategy among neural network is to Hold Nikkei 225 Index Stock.
Q: Is Nikkei 225 Index stock a good investment?
A: The consensus rating for Nikkei 225 Index is Hold and assigned short-term Ba3 & long-term Ba3 forecasted stock rating.
Q: What is the consensus rating of Nikkei 225 Index stock?
A: The consensus rating for Nikkei 225 Index is Hold.
Q: What is the prediction period for Nikkei 225 Index stock?
A: The prediction period for Nikkei 225 Index is (n+6 month)

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