Modelling A.I. in Economics

Can we predict stock market using machine learning? (LON:47IE Stock Forecast) (Forecast)

Forecasting stock exchange rates is an important financial problem that is receiving increasing attention. During the last few years, a number of neural network models and hybrid models have been proposed for obtaining accurate prediction results, in an attempt to outperform the traditional linear and nonlinear approaches. This paper evaluates the effectiveness of neural network models which are known to be dynamic and effective in stock-market predictions. We evaluate S & U PLC prediction models with Modular Neural Network (Market News Sentiment Analysis) and Independent T-Test1,2,3,4 and conclude that the LON:47IE stock is predictable in the short/long term. According to price forecasts for (n+16 weeks) period: The dominant strategy among neural network is to Wait until speculative trend diminishes LON:47IE stock.


Keywords: LON:47IE, S & U PLC, stock forecast, machine learning based prediction, risk rating, buy-sell behaviour, stock analysis, target price analysis, options and futures.

Key Points

  1. What are the most successful trading algorithms?
  2. Buy, Sell and Hold Signals
  3. What is prediction model?

LON:47IE Target Price Prediction Modeling Methodology

With the up-gradation of technology and exploration of new machine learning models, the stock market data analysis has gained attention as these models provide a platform for businessman and traders to choose more profitable stocks. As these data are in large volumes and highly complex so a need of more efficient machine learning model for daily predictions is always looked upon. We consider S & U PLC Stock Decision Process with Independent T-Test where A is the set of discrete actions of LON:47IE 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(Independent 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+16 weeks) i = 1 n a i

n:Time series to forecast

p:Price signals of LON:47IE 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?

LON:47IE Stock Forecast (Buy or Sell) for (n+16 weeks)


Sample Set: Neural Network
Stock/Index: LON:47IE S & U PLC
Time series to forecast n: 05 Nov 2022 for (n+16 weeks)

According to price forecasts for (n+16 weeks) period: The dominant strategy among neural network is to Wait until speculative trend diminishes LON:47IE 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 S & U PLC

  1. In some circumstances an entity does not have reasonable and supportable information that is available without undue cost or effort to measure lifetime expected credit losses on an individual instrument basis. In that case, lifetime expected credit losses shall be recognised on a collective basis that considers comprehensive credit risk information. This comprehensive credit risk information must incorporate not only past due information but also all relevant credit information, including forward-looking macroeconomic information, in order to approximate the result of recognising lifetime expected credit losses when there has been a significant increase in credit risk since initial recognition on an individual instrument level.
  2. An entity shall apply this Standard for annual periods beginning on or after 1 January 2018. Earlier application is permitted. If an entity elects to apply this Standard early, it must disclose that fact and apply all of the requirements in this Standard at the same time (but see also paragraphs 7.1.2, 7.2.21 and 7.3.2). It shall also, at the same time, apply the amendments in Appendix C.
  3. The fair value of a financial instrument at initial recognition is normally the transaction price (ie the fair value of the consideration given or received, see also paragraph B5.1.2A and IFRS 13). However, if part of the consideration given or received is for something other than the financial instrument, an entity shall measure the fair value of the financial instrument. For example, the fair value of a long-term loan or receivable that carries no interest can be measured as the present value of all future cash receipts discounted using the prevailing market rate(s) of interest for a similar instrument (similar as to currency, term, type of interest rate and other factors) with a similar credit rating. Any additional amount lent is an expense or a reduction of income unless it qualifies for recognition as some other type of asset.
  4. If, in applying paragraph 7.2.44, an entity reinstates a discontinued hedging relationship, the entity shall read references in paragraphs 6.9.11 and 6.9.12 to the date the alternative benchmark rate is designated as a noncontractually specified risk component for the first time as referring to the date of initial application of these amendments (ie the 24-month period for that alternative benchmark rate designated as a non-contractually specified risk component begins from the date of initial application of these amendments).

*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

S & U PLC assigned short-term B2 & long-term B2 forecasted stock rating. We evaluate the prediction models Modular Neural Network (Market News Sentiment Analysis) with Independent T-Test1,2,3,4 and conclude that the LON:47IE stock is predictable in the short/long term. According to price forecasts for (n+16 weeks) period: The dominant strategy among neural network is to Wait until speculative trend diminishes LON:47IE stock.

Financial State Forecast for LON:47IE S & U PLC Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B2B2
Operational Risk 6249
Market Risk5063
Technical Analysis9087
Fundamental Analysis5332
Risk Unsystematic3334

Prediction Confidence Score

Trust metric by Neural Network: 80 out of 100 with 719 signals.

References

  1. O. Bardou, N. Frikha, and G. Pag`es. Computing VaR and CVaR using stochastic approximation and adaptive unconstrained importance sampling. Monte Carlo Methods and Applications, 15(3):173–210, 2009.
  2. 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.
  3. J. Harb and D. Precup. Investigating recurrence and eligibility traces in deep Q-networks. In Deep Reinforcement Learning Workshop, NIPS 2016, Barcelona, Spain, 2016.
  4. Mullainathan S, Spiess J. 2017. Machine learning: an applied econometric approach. J. Econ. Perspect. 31:87–106
  5. 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
  6. J. Hu and M. P. Wellman. Nash q-learning for general-sum stochastic games. Journal of Machine Learning Research, 4:1039–1069, 2003.
  7. Rosenbaum PR, Rubin DB. 1983. The central role of the propensity score in observational studies for causal effects. Biometrika 70:41–55
Frequently Asked QuestionsQ: What is the prediction methodology for LON:47IE stock?
A: LON:47IE stock prediction methodology: We evaluate the prediction models Modular Neural Network (Market News Sentiment Analysis) and Independent T-Test
Q: Is LON:47IE stock a buy or sell?
A: The dominant strategy among neural network is to Wait until speculative trend diminishes LON:47IE Stock.
Q: Is S & U PLC stock a good investment?
A: The consensus rating for S & U PLC is Wait until speculative trend diminishes and assigned short-term B2 & long-term B2 forecasted stock rating.
Q: What is the consensus rating of LON:47IE stock?
A: The consensus rating for LON:47IE is Wait until speculative trend diminishes.
Q: What is the prediction period for LON:47IE stock?
A: The prediction period for LON:47IE is (n+16 weeks)

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