Does algo trading work? (CVS Stock Forecast)

CVS Health Research Report

Summary

As part of this research, different techniques have been studied for data extraction and analysis. After having reviewed the work related to the initial idea of the research, it is shown the development carried out, together with the data extraction and the machine learning algorithms for prediction used. The calculation of technical analysis metrics is also included. The development of a visualization platform has been proposed for high-level interaction between the user and the recommendation system. We evaluate CVS Health prediction models with Modular Neural Network (Social Media Sentiment Analysis) and Multiple Regression^1,2,3,4 and conclude that the CVS 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 CVS stock.

Key Points

1. How useful are statistical predictions?
2. How useful are statistical predictions?
3. Stock Forecast Based On a Predictive Algorithm

CVS Target Price Prediction Modeling Methodology

We consider CVS Health Stock Decision Process with Modular Neural Network (Social Media Sentiment Analysis) where A is the set of discrete actions of CVS 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(Multiple Regression)^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 (Social Media Sentiment Analysis)) X S(n):→ (n+6 month) $\begin{array}{l}\int e^x\mathrm{rx}\end{array}$

n:Time series to forecast

p:Price signals of CVS 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?

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

Sample Set: Neural Network
Stock/Index: CVS CVS Health
Time series to forecast n: 18 Nov 2022 for (n+6 month)

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

1. In some circumstances, the renegotiation or modification of the contractual cash flows of a financial asset can lead to the derecognition of the existing financial asset in accordance with this Standard. When the modification of a financial asset results in the derecognition of the existing financial asset and the subsequent recognition of the modified financial asset, the modified asset is considered a 'new' financial asset for the purposes of this Standard.
2. An entity shall apply Prepayment Features with Negative Compensation (Amendments to IFRS 9) retrospectively in accordance with IAS 8, except as specified in paragraphs 7.2.30–7.2.34
3. Annual Improvements to IFRS Standards 2018–2020, issued in May 2020, added paragraphs 7.2.35 and B3.3.6A and amended paragraph B3.3.6. An entity shall apply that amendment for annual reporting periods beginning on or after 1 January 2022. Earlier application is permitted. If an entity applies the amendment for an earlier period, it shall disclose that fact.
4. The definition of a derivative in this Standard includes contracts that are settled gross by delivery of the underlying item (eg a forward contract to purchase a fixed rate debt instrument). An entity may have a contract to buy or sell a non-financial item that can be settled net in cash or another financial instrument or by exchanging financial instruments (eg a contract to buy or sell a commodity at a fixed price at a future date). Such a contract is within the scope of this Standard unless it was entered into and continues to be held for the purpose of delivery of a non-financial item in accordance with the entity's expected purchase, sale or usage requirements. However, this Standard applies to such contracts for an entity's expected purchase, sale or usage requirements if the entity makes a designation in accordance with paragraph 2.5 (see paragraphs 2.4–2.7).

*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

CVS Health assigned short-term B3 & long-term Ba3 forecasted stock rating. We evaluate the prediction models Modular Neural Network (Social Media Sentiment Analysis) with Multiple Regression^1,2,3,4 and conclude that the CVS 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 CVS stock.

Financial State Forecast for CVS CVS Health Stock Options & Futures

Rating	Short-Term	Long-Term Senior
Outlook*	B3	Ba3
Operational Risk	55	78
Market Risk	64	42
Technical Analysis	52	44
Fundamental Analysis	35	76
Risk Unsystematic	52	76

Prediction Confidence Score

Trust metric by Neural Network: 72 out of 100 with 489 signals.

References

1. P. Artzner, F. Delbaen, J. Eber, and D. Heath. Coherent measures of risk. Journal of Mathematical Finance, 9(3):203–228, 1999
2. Bennett J, Lanning S. 2007. The Netflix prize. In Proceedings of KDD Cup and Workshop 2007, p. 35. New York: ACM
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. Li L, Chen S, Kleban J, Gupta A. 2014. Counterfactual estimation and optimization of click metrics for search engines: a case study. In Proceedings of the 24th International Conference on the World Wide Web, pp. 929–34. New York: ACM
5. E. Altman. Constrained Markov decision processes, volume 7. CRC Press, 1999
6. Artis, M. J. W. Zhang (1990), "BVAR forecasts for the G-7," International Journal of Forecasting, 6, 349–362.
7. E. Collins. Using Markov decision processes to optimize a nonlinear functional of the final distribution, with manufacturing applications. In Stochastic Modelling in Innovative Manufacturing, pages 30–45. Springer, 1997

Frequently Asked Questions

Q: What is the prediction methodology for CVS stock?
A: CVS stock prediction methodology: We evaluate the prediction models Modular Neural Network (Social Media Sentiment Analysis) and Multiple Regression
Q: Is CVS stock a buy or sell?
A: The dominant strategy among neural network is to Sell CVS Stock.
Q: Is CVS Health stock a good investment?
A: The consensus rating for CVS Health is Sell and assigned short-term B3 & long-term Ba3 forecasted stock rating.
Q: What is the consensus rating of CVS stock?
A: The consensus rating for CVS is Sell.
Q: What is the prediction period for CVS stock?
A: The prediction period for CVS is (n+6 month)

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