Can we predict stock market using machine learning? (LON:BMS Stock Forecast)

BRAEMAR SHIPPING SERVICES PLC Research Report

Summary

Three networks are compared for low false alarm stock trend predictions. Short-term trends, particularly attractive for neural network analysis, can be used profitably in scenarios such as option trading, but only with significant risk. Therefore, we focus on limiting false alarms, which improves the risk/reward ratio by preventing losses. To predict stock trends, we exploit time delay, recurrent, and probabilistic neural networks (TDNN, RNN, and PNN, respectively), utilizing conjugate gradient and multistream extended Kalman filter training for TDNN and RNN. We evaluate BRAEMAR SHIPPING SERVICES PLC prediction models with Transfer Learning (ML) and Wilcoxon Rank-Sum Test1,2,3,4 and conclude that the LON:BMS 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 Buy LON:BMS stock.

Key Points

  1. What is prediction model?
  2. Prediction Modeling
  3. How do you decide buy or sell a stock?

LON:BMS Target Price Prediction Modeling Methodology

We consider BRAEMAR SHIPPING SERVICES PLC Stock Decision Process with Transfer Learning (ML) where A is the set of discrete actions of LON:BMS 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 Rank-Sum 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(Transfer Learning (ML)) X S(n):→ (n+8 weeks) S = s 1 s 2 s 3

n:Time series to forecast

p:Price signals of LON:BMS stock

j:Nash equilibria (Neural Network)

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?

LON:BMS Stock Forecast (Buy or Sell) for (n+8 weeks)

Sample Set: Neural Network
Stock/Index: LON:BMS BRAEMAR SHIPPING SERVICES PLC
Time series to forecast n: 21 Nov 2022 for (n+8 weeks)

According to price forecasts for (n+8 weeks) period: The dominant strategy among neural network is to Buy LON:BMS 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 BRAEMAR SHIPPING SERVICES PLC

  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. The following example describes a situation in which an accounting mismatch would be created in profit or loss if the effects of changes in the credit risk of the liability were presented in other comprehensive income. A mortgage bank provides loans to customers and funds those loans by selling bonds with matching characteristics (eg amount outstanding, repayment profile, term and currency) in the market. The contractual terms of the loan permit the mortgage customer to prepay its loan (ie satisfy its obligation to the bank) by buying the corresponding bond at fair value in the market and delivering that bond to the mortgage bank. As a result of that contractual prepayment right, if the credit quality of the bond worsens (and, thus, the fair value of the mortgage bank's liability decreases), the fair value of the mortgage bank's loan asset also decreases. The change in the fair value of the asset reflects the mortgage customer's contractual right to prepay the mortgage loan by buying the underlying bond at fair value (which, in this example, has decreased) and delivering the bond to the mortgage bank. Consequently, the effects of changes in the credit risk of the liability (the bond) will be offset in profit or loss by a corresponding change in the fair value of a financial asset (the loan). If the effects of changes in the liability's credit risk were presented in other comprehensive income there would be an accounting mismatch in profit or loss. Consequently, the mortgage bank is required to present all changes in fair value of the liability (including the effects of changes in the liability's credit risk) in profit or loss.
  3. The methods used to determine whether credit risk has increased significantly on a financial instrument since initial recognition should consider the characteristics of the financial instrument (or group of financial instruments) and the default patterns in the past for comparable financial instruments. Despite the requirement in paragraph 5.5.9, for financial instruments for which default patterns are not concentrated at a specific point during the expected life of the financial instrument, changes in the risk of a default occurring over the next 12 months may be a reasonable approximation of the changes in the lifetime risk of a default occurring. In such cases, an entity may use changes in the risk of a default occurring over the next 12 months to determine whether credit risk has increased significantly since initial recognition, unless circumstances indicate that a lifetime assessment is necessary
  4. Lifetime expected credit losses are generally expected to be recognised before a financial instrument becomes past due. Typically, credit risk increases significantly before a financial instrument becomes past due or other lagging borrower-specific factors (for example, a modification or restructuring) are observed. Consequently when reasonable and supportable information that is more forward-looking than past due information is available without undue cost or effort, it must be used to assess changes in credit risk.

*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

BRAEMAR SHIPPING SERVICES PLC assigned short-term Caa2 & long-term B1 forecasted stock rating. We evaluate the prediction models Transfer Learning (ML) with Wilcoxon Rank-Sum Test1,2,3,4 and conclude that the LON:BMS 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 Buy LON:BMS stock.

Financial State Forecast for LON:BMS BRAEMAR SHIPPING SERVICES PLC Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*Caa2B1
Operational Risk 4335
Market Risk3152
Technical Analysis6168
Fundamental Analysis3184
Risk Unsystematic5245

Prediction Confidence Score

Trust metric by Neural Network: 90 out of 100 with 711 signals.

References

  1. N. B ̈auerle and J. Ott. Markov decision processes with average-value-at-risk criteria. Mathematical Methods of Operations Research, 74(3):361–379, 2011
  2. M. Petrik and D. Subramanian. An approximate solution method for large risk-averse Markov decision processes. In Proceedings of the 28th International Conference on Uncertainty in Artificial Intelligence, 2012.
  3. V. Borkar. A sensitivity formula for the risk-sensitive cost and the actor-critic algorithm. Systems & Control Letters, 44:339–346, 2001
  4. B. Derfer, N. Goodyear, K. Hung, C. Matthews, G. Paoni, K. Rollins, R. Rose, M. Seaman, and J. Wiles. Online marketing platform, August 17 2007. US Patent App. 11/893,765
  5. Bamler R, Mandt S. 2017. Dynamic word embeddings via skip-gram filtering. In Proceedings of the 34th Inter- national Conference on Machine Learning, pp. 380–89. La Jolla, CA: Int. Mach. Learn. Soc.
  6. Athey S. 2017. Beyond prediction: using big data for policy problems. Science 355:483–85
  7. Belloni A, Chernozhukov V, Hansen C. 2014. High-dimensional methods and inference on structural and treatment effects. J. Econ. Perspect. 28:29–50
Frequently Asked QuestionsQ: What is the prediction methodology for LON:BMS stock?
A: LON:BMS stock prediction methodology: We evaluate the prediction models Transfer Learning (ML) and Wilcoxon Rank-Sum Test
Q: Is LON:BMS stock a buy or sell?
A: The dominant strategy among neural network is to Buy LON:BMS Stock.
Q: Is BRAEMAR SHIPPING SERVICES PLC stock a good investment?
A: The consensus rating for BRAEMAR SHIPPING SERVICES PLC is Buy and assigned short-term Caa2 & long-term B1 forecasted stock rating.
Q: What is the consensus rating of LON:BMS stock?
A: The consensus rating for LON:BMS is Buy.
Q: What is the prediction period for LON:BMS stock?
A: The prediction period for LON:BMS is (n+8 weeks)

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