Modelling A.I. in Economics

Can we predict stock market using machine learning? (NSE CESC Stock Forecast) (Forecast)

This paper aims to develop an innovative neural network approach to achieve better stock market predictions. Data were obtained from the live stock market for real-time and off-line analysis and results of visualizations and analytics to demonstrate Internet of Multimedia of Things for stock analysis. To study the influence of market characteristics on stock prices, traditional neural network algorithms may incorrectly predict the stock market, since the initial weight of the random selection problem can be easily prone to incorrect predictions. We evaluate CESC Limited prediction models with Modular Neural Network (Market Volatility Analysis) and Logistic Regression1,2,3,4 and conclude that the NSE CESC 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 Sell NSE CESC stock.


Keywords: NSE CESC, CESC Limited, stock forecast, machine learning based prediction, risk rating, buy-sell behaviour, stock analysis, target price analysis, options and futures.

Key Points

  1. Stock Rating
  2. Which neural network is best for prediction?
  3. Prediction Modeling

NSE CESC Target Price Prediction Modeling Methodology

A speculator on a Stock Market, aside from having money to spare, needs at least one other thing — a means of producing accurate and understandable predictions ahead of others in the Market, so that a tactical and price advantage can be gained. This work demonstrates that it is possible to predict one such Market to a high degree of accuracy. We consider CESC Limited Stock Decision Process with Logistic Regression where A is the set of discrete actions of NSE CESC 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(Logistic Regression)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 Volatility Analysis)) X S(n):→ (n+6 month) i = 1 n r i

n:Time series to forecast

p:Price signals of NSE CESC 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?

NSE CESC Stock Forecast (Buy or Sell) for (n+6 month)

Sample Set: Neural Network
Stock/Index: NSE CESC CESC Limited
Time series to forecast n: 15 Nov 2022 for (n+6 month)

According to price forecasts for (n+6 month) period: The dominant strategy among neural network is to Sell NSE CESC 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 CESC Limited

  1. An entity is not required to incorporate forecasts of future conditions over the entire expected life of a financial instrument. The degree of judgement that is required to estimate expected credit losses depends on the availability of detailed information. As the forecast horizon increases, the availability of detailed information decreases and the degree of judgement required to estimate expected credit losses increases. The estimate of expected credit losses does not require a detailed estimate for periods that are far in the future—for such periods, an entity may extrapolate projections from available, detailed information.
  2. If an entity has applied paragraph 7.2.6 then at the date of initial application the entity shall recognise any difference between the fair value of the entire hybrid contract at the date of initial application and the sum of the fair values of the components of the hybrid contract at the date of initial application in the opening retained earnings (or other component of equity, as appropriate) of the reporting period that includes the date of initial application.
  3. To calculate the change in the value of the hedged item for the purpose of measuring hedge ineffectiveness, an entity may use a derivative that would have terms that match the critical terms of the hedged item (this is commonly referred to as a 'hypothetical derivative'), and, for example for a hedge of a forecast transaction, would be calibrated using the hedged price (or rate) level. For example, if the hedge was for a two-sided risk at the current market level, the hypothetical derivative would represent a hypothetical forward contract that is calibrated to a value of nil at the time of designation of the hedging relationship. If the hedge was for example for a one-sided risk, the hypothetical derivative would represent the intrinsic value of a hypothetical option that at the time of designation of the hedging relationship is at the money if the hedged price level is the current market level, or out of the money if the hedged price level is above (or, for a hedge of a long position, below) the current market level. Using a hypothetical derivative is one possible way of calculating the change in the value of the hedged item. The hypothetical derivative replicates the hedged item and hence results in the same outcome as if that change in value was determined by a different approach. Hence, using a 'hypothetical derivative' is not a method in its own right but a mathematical expedient that can only be used to calculate the value of the hedged item. Consequently, a 'hypothetical derivative' cannot be used to include features in the value of the hedged item that only exist in the hedging instrument (but not in the hedged item). An example is debt denominated in a foreign currency (irrespective of whether it is fixed-rate or variable-rate debt). When using a hypothetical derivative to calculate the change in the value of such debt or the present value of the cumulative change in its cash flows, the hypothetical derivative cannot simply impute a charge for exchanging different currencies even though actual derivatives under which different currencies are exchanged might include such a charge (for example, cross-currency interest rate swaps).
  4. In addition to those hedging relationships specified in paragraph 6.9.1, an entity shall apply the requirements in paragraphs 6.9.11 and 6.9.12 to new hedging relationships in which an alternative benchmark rate is designated as a non-contractually specified risk component (see paragraphs 6.3.7(a) and B6.3.8) when, because of interest rate benchmark reform, that risk component is not separately identifiable at the date it is designated.

*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

CESC Limited assigned short-term B2 & long-term B2 forecasted stock rating. We evaluate the prediction models Modular Neural Network (Market Volatility Analysis) with Logistic Regression1,2,3,4 and conclude that the NSE CESC 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 Sell NSE CESC stock.

Financial State Forecast for NSE CESC CESC Limited Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B2B2
Operational Risk 5577
Market Risk5237
Technical Analysis5645
Fundamental Analysis7557
Risk Unsystematic3449

Prediction Confidence Score

Trust metric by Neural Network: 93 out of 100 with 780 signals.

References

  1. S. J. Russell and P. Norvig. Artificial Intelligence: A Modern Approach. Prentice Hall, Englewood Cliffs, NJ, 3nd edition, 2010
  2. Candès E, Tao T. 2007. The Dantzig selector: statistical estimation when p is much larger than n. Ann. Stat. 35:2313–51
  3. A. Tamar, D. Di Castro, and S. Mannor. Policy gradients with variance related risk criteria. In Proceedings of the Twenty-Ninth International Conference on Machine Learning, pages 387–396, 2012.
  4. Mullainathan S, Spiess J. 2017. Machine learning: an applied econometric approach. J. Econ. Perspect. 31:87–106
  5. P. Milgrom and I. Segal. Envelope theorems for arbitrary choice sets. Econometrica, 70(2):583–601, 2002
  6. M. J. Hausknecht. Cooperation and Communication in Multiagent Deep Reinforcement Learning. PhD thesis, The University of Texas at Austin, 2016
  7. Ashley, R. (1988), "On the relative worth of recent macroeconomic forecasts," International Journal of Forecasting, 4, 363–376.
Frequently Asked QuestionsQ: What is the prediction methodology for NSE CESC stock?
A: NSE CESC stock prediction methodology: We evaluate the prediction models Modular Neural Network (Market Volatility Analysis) and Logistic Regression
Q: Is NSE CESC stock a buy or sell?
A: The dominant strategy among neural network is to Sell NSE CESC Stock.
Q: Is CESC Limited stock a good investment?
A: The consensus rating for CESC Limited is Sell and assigned short-term B2 & long-term B2 forecasted stock rating.
Q: What is the consensus rating of NSE CESC stock?
A: The consensus rating for NSE CESC is Sell.
Q: What is the prediction period for NSE CESC stock?
A: The prediction period for NSE CESC is (n+6 month)

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