Can stock prices be predicted? (ROST Stock Forecast)

Stock price prediction has always been a challenging task for the researchers in financial domain. While the Efficient Market Hypothesis claims that it is impossible to predict stock prices accurately, there are work in the literature that have demonstrated that stock price movements can be forecasted with a reasonable degree of accuracy, if appropriate variables are chosen and suitable predictive models are built using those variables. In this work, we present a robust and accurate framework of stock price prediction using statistical, machine learning and deep learning methods We evaluate Ross Stores prediction models with Modular Neural Network (DNN Layer) and Wilcoxon Sign-Rank Test^1,2,3,4 and conclude that the ROST 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 Hold ROST stock.

Keywords: ROST, Ross Stores, stock forecast, machine learning based prediction, risk rating, buy-sell behaviour, stock analysis, target price analysis, options and futures.

Key Points

1. What is statistical models in machine learning?
2. Stock Rating
3. What is the use of Markov decision process?

ROST Target Price Prediction Modeling Methodology

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 consider Ross Stores Stock Decision Process with Wilcoxon Sign-Rank Test where A is the set of discrete actions of ROST 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= $\begin{array}{cccc}{p}_{\mathrm{a}1}& p_{\mathrm{a}2}& \dots & p_{1n}\\ & ⋮\\ p_{j1}& p_{j2}& \dots & p_{jn}\\ & ⋮\\ p_{k1}& p_{k2}& \dots & p_{kn}\\ & ⋮\\ p_{n1}& p_{n2}& \dots & p_{nn}\end{array}$ X R(Modular Neural Network (DNN Layer)) X S(n):→ (n+8 weeks) $\sum _{i=1}^n\left(r_i\right)$

n:Time series to forecast

p:Price signals of ROST 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?

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

Sample Set: Neural Network
Stock/Index: ROST Ross Stores
Time series to forecast n: 10 Nov 2022 for (n+8 weeks)

According to price forecasts for (n+8 weeks) period: The dominant strategy among neural network is to Hold ROST 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 Ross Stores

1. For the purpose of applying the requirements in paragraphs 6.4.1(c)(i) and B6.4.4–B6.4.6, an entity shall assume that the interest rate benchmark on which the hedged cash flows and/or the hedged risk (contractually or noncontractually specified) are based, or the interest rate benchmark on which the cash flows of the hedging instrument are based, is not altered as a result of interest rate benchmark reform.
2. Conversely, if changes in the extent of offset indicate that the fluctuation is around a hedge ratio that is different from the hedge ratio that is currently used for that hedging relationship, or that there is a trend leading away from that hedge ratio, hedge ineffectiveness can be reduced by adjusting the hedge ratio, whereas retaining the hedge ratio would increasingly produce hedge ineffectiveness. Hence, in such circumstances, an entity must evaluate whether the hedging relationship reflects an imbalance between the weightings of the hedged item and the hedging instrument that would create hedge ineffectiveness (irrespective of whether recognised or not) that could result in an accounting outcome that would be inconsistent with the purpose of hedge accounting. If the hedge ratio is adjusted, it also affects the measurement and recognition of hedge ineffectiveness because, on rebalancing, the hedge ineffectiveness of the hedging relationship must be determined and recognised immediately before adjusting the hedging relationship in accordance with paragraph B6.5.8.
3. An entity shall assess whether contractual cash flows are solely payments of principal and interest on the principal amount outstanding for the currency in which the financial asset is denominated.
4. If any instrument in the pool does not meet the conditions in either paragraph B4.1.23 or paragraph B4.1.24, the condition in paragraph B4.1.21(b) is not met. In performing this assessment, a detailed instrument-byinstrument analysis of the pool may not be necessary. However, an entity must use judgement and perform sufficient analysis to determine whether the instruments in the pool meet the conditions in paragraphs B4.1.23–B4.1.24. (See also paragraph B4.1.18 for guidance on contractual cash flow characteristics that have only a de minimis effect.)

*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

Ross Stores assigned short-term Caa2 & long-term B1 forecasted stock rating. We evaluate the prediction models Modular Neural Network (DNN Layer) with Wilcoxon Sign-Rank Test^1,2,3,4 and conclude that the ROST 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 Hold ROST stock.

Financial State Forecast for ROST Ross Stores Stock Options & Futures

Rating	Short-Term	Long-Term Senior
Outlook*	Caa2	B1
Operational Risk	48	58
Market Risk	60	76
Technical Analysis	35	90
Fundamental Analysis	46	38
Risk Unsystematic	38	37

Prediction Confidence Score

Trust metric by Neural Network: 90 out of 100 with 641 signals.

References

1. Armstrong, J. S. M. C. Grohman (1972), "A comparative study of methods for long-range market forecasting," Management Science, 19, 211–221.
2. H. Kushner and G. Yin. Stochastic approximation algorithms and applications. Springer, 1997.
3. E. van der Pol and F. A. Oliehoek. Coordinated deep reinforcement learners for traffic light control. NIPS Workshop on Learning, Inference and Control of Multi-Agent Systems, 2016.
4. Andrews, D. W. K. W. Ploberger (1994), "Optimal tests when a nuisance parameter is present only under the alternative," Econometrica, 62, 1383–1414.
5. D. Bertsekas and J. Tsitsiklis. Neuro-dynamic programming. Athena Scientific, 1996.
6. Angrist JD, Pischke JS. 2008. Mostly Harmless Econometrics: An Empiricist's Companion. Princeton, NJ: Princeton Univ. Press
7. K. Tuyls and G. Weiss. Multiagent learning: Basics, challenges, and prospects. AI Magazine, 33(3): 41–52, 2012

Frequently Asked Questions

Q: What is the prediction methodology for ROST stock?
A: ROST stock prediction methodology: We evaluate the prediction models Modular Neural Network (DNN Layer) and Wilcoxon Sign-Rank Test
Q: Is ROST stock a buy or sell?
A: The dominant strategy among neural network is to Hold ROST Stock.
Q: Is Ross Stores stock a good investment?
A: The consensus rating for Ross Stores is Hold and assigned short-term Caa2 & long-term B1 forecasted stock rating.
Q: What is the consensus rating of ROST stock?
A: The consensus rating for ROST is Hold.
Q: What is the prediction period for ROST stock?
A: The prediction period for ROST is (n+8 weeks)

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