Modelling A.I. in Economics

Can stock prices be predicted? (UTHR Stock Forecast)

In this paper, we introduce a new prediction model depend on Bidirectional Gated Recurrent Unit (BGRU). Our predictive model relies on both online financial news and historical stock prices data to predict the stock movements in the future. We evaluate United Therapeutics prediction models with Modular Neural Network (DNN Layer) and Chi-Square1,2,3,4 and conclude that the UTHR stock is predictable in the short/long term. According to price forecasts for (n+3 month) period: The dominant strategy among neural network is to Buy UTHR stock.


Keywords: UTHR, United Therapeutics, stock forecast, machine learning based prediction, risk rating, buy-sell behaviour, stock analysis, target price analysis, options and futures.

Key Points

  1. Market Signals
  2. Is Target price a good indicator?
  3. What is prediction model?

UTHR Target Price Prediction Modeling Methodology

One decision in Stock Market can make huge impact on an investor's life. The stock market is a complex system and often covered in mystery, it is therefore, very difficult to analyze all the impacting factors before making a decision. In this research, we have tried to design a stock market prediction model which is based on different factors. We consider United Therapeutics Stock Decision Process with Chi-Square where A is the set of discrete actions of UTHR 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(Chi-Square)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 (DNN Layer)) X S(n):→ (n+3 month) R = r 1 r 2 r 3

n:Time series to forecast

p:Price signals of UTHR 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?

UTHR Stock Forecast (Buy or Sell) for (n+3 month)


Sample Set: Neural Network
Stock/Index: UTHR United Therapeutics
Time series to forecast n: 06 Nov 2022 for (n+3 month)

According to price forecasts for (n+3 month) period: The dominant strategy among neural network is to Buy UTHR 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 United Therapeutics

  1. IFRS 15, issued in May 2014, amended paragraphs 3.1.1, 4.2.1, 5.1.1, 5.2.1, 5.7.6, B3.2.13, B5.7.1, C5 and C42 and deleted paragraph C16 and its related heading. Paragraphs 5.1.3 and 5.7.1A, and a definition to Appendix A, were added. An entity shall apply those amendments when it applies IFRS 15.
  2. If, at the date of initial application, it is impracticable (as defined in IAS 8) for an entity to assess a modified time value of money element in accordance with paragraphs B4.1.9B–B4.1.9D on the basis of the facts and circumstances that existed at the initial recognition of the financial asset, an entity shall assess the contractual cash flow characteristics of that financial asset on the basis of the facts and circumstances that existed at the initial recognition of the financial asset without taking into account the requirements related to the modification of the time value of money element in paragraphs B4.1.9B–B4.1.9D. (See also paragraph 42R of IFRS 7.)
  3. IFRS 17, issued in May 2017, amended paragraphs 2.1, B2.1, B2.4, B2.5 and B4.1.30, and added paragraph 3.3.5. Amendments to IFRS 17, issued in June 2020, further amended paragraph 2.1 and added paragraphs 7.2.36‒7.2.42. An entity shall apply those amendments when it applies IFRS 17.
  4. Paragraph 6.3.6 states that in consolidated financial statements the foreign currency risk of a highly probable forecast intragroup transaction may qualify as a hedged item in a cash flow hedge, provided that the transaction is denominated in a currency other than the functional currency of the entity entering into that transaction and that the foreign currency risk will affect consolidated profit or loss. For this purpose an entity can be a parent, subsidiary, associate, joint arrangement or branch. If the foreign currency risk of a forecast intragroup transaction does not affect consolidated profit or loss, the intragroup transaction cannot qualify as a hedged item. This is usually the case for royalty payments, interest payments or management charges between members of the same group, unless there is a related external transaction. However, when the foreign currency risk of a forecast intragroup transaction will affect consolidated profit or loss, the intragroup transaction can qualify as a hedged item. An example is forecast sales or purchases of inventories between members of the same group if there is an onward sale of the inventory to a party external to the group. Similarly, a forecast intragroup sale of plant and equipment from the group entity that manufactured it to a group entity that will use the plant and equipment in its operations may affect consolidated profit or loss. This could occur, for example, because the plant and equipment will be depreciated by the purchasing entity and the amount initially recognised for the plant and equipment may change if the forecast intragroup transaction is denominated in a currency other than the functional currency of the purchasing entity.

*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

United Therapeutics assigned short-term B3 & long-term B1 forecasted stock rating. We evaluate the prediction models Modular Neural Network (DNN Layer) with Chi-Square1,2,3,4 and conclude that the UTHR stock is predictable in the short/long term. According to price forecasts for (n+3 month) period: The dominant strategy among neural network is to Buy UTHR stock.

Financial State Forecast for UTHR United Therapeutics Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B3B1
Operational Risk 6967
Market Risk6435
Technical Analysis3556
Fundamental Analysis3184
Risk Unsystematic4157

Prediction Confidence Score

Trust metric by Neural Network: 79 out of 100 with 865 signals.

References

  1. Mnih A, Hinton GE. 2007. Three new graphical models for statistical language modelling. In International Conference on Machine Learning, pp. 641–48. La Jolla, CA: Int. Mach. Learn. Soc.
  2. J. Z. Leibo, V. Zambaldi, M. Lanctot, J. Marecki, and T. Graepel. Multi-agent Reinforcement Learning in Sequential Social Dilemmas. In Proceedings of the 16th International Conference on Autonomous Agents and Multiagent Systems (AAMAS 2017), Sao Paulo, Brazil, 2017
  3. Christou, C., P. A. V. B. Swamy G. S. Tavlas (1996), "Modelling optimal strategies for the allocation of wealth in multicurrency investments," International Journal of Forecasting, 12, 483–493.
  4. L. Panait and S. Luke. Cooperative multi-agent learning: The state of the art. Autonomous Agents and Multi-Agent Systems, 11(3):387–434, 2005.
  5. Brailsford, T.J. R.W. Faff (1996), "An evaluation of volatility forecasting techniques," Journal of Banking Finance, 20, 419–438.
  6. H. Khalil and J. Grizzle. Nonlinear systems, volume 3. Prentice hall Upper Saddle River, 2002.
  7. Chamberlain G. 2000. Econometrics and decision theory. J. Econom. 95:255–83
Frequently Asked QuestionsQ: What is the prediction methodology for UTHR stock?
A: UTHR stock prediction methodology: We evaluate the prediction models Modular Neural Network (DNN Layer) and Chi-Square
Q: Is UTHR stock a buy or sell?
A: The dominant strategy among neural network is to Buy UTHR Stock.
Q: Is United Therapeutics stock a good investment?
A: The consensus rating for United Therapeutics is Buy and assigned short-term B3 & long-term B1 forecasted stock rating.
Q: What is the consensus rating of UTHR stock?
A: The consensus rating for UTHR is Buy.
Q: What is the prediction period for UTHR stock?
A: The prediction period for UTHR is (n+3 month)

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