Does algo trading work? (KNSL Stock Forecast)

Stock market is a promising financial investment that can generate great wealth. However, the volatile nature of the stock market makes it a very high risk investment. Thus, a lot of researchers have contributed their efforts to forecast the stock market pricing and average movement. Researchers have used various methods in computer science and economics in their quests to gain a piece of this volatile information and make great fortune out of the stock market investment. This paper investigates various techniques for the stock market prediction using artificial neural network (ANN). We evaluate Kinsale Capital Group prediction models with Supervised Machine Learning (ML) and Sign Test^1,2,3,4 and conclude that the KNSL stock is predictable in the short/long term. According to price forecasts for (n+1 year) period: The dominant strategy among neural network is to Buy KNSL stock.

Keywords: KNSL, Kinsale Capital Group, stock forecast, machine learning based prediction, risk rating, buy-sell behaviour, stock analysis, target price analysis, options and futures.

Key Points

1. Prediction Modeling
2. Probability Distribution
3. Trading Signals

KNSL Target Price Prediction Modeling Methodology

In the business sector, it has always been a difficult task to predict the exact daily price of the stock market index; hence, there is a great deal of research being conducted regarding the prediction of the direction of stock price index movement. Many factors such as political events, general economic conditions, and traders' expectations may have an influence on the stock market index. There are numerous research studies that use similar indicators to forecast the direction of the stock market index. We consider Kinsale Capital Group Stock Decision Process with Sign Test where A is the set of discrete actions of KNSL 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(Sign Test)^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(Supervised Machine Learning (ML)) X S(n):→ (n+1 year) $\begin{array}{l}\int e^x\mathrm{rx}\end{array}$

n:Time series to forecast

p:Price signals of KNSL 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?

KNSL Stock Forecast (Buy or Sell) for (n+1 year)

Sample Set: Neural Network
Stock/Index: KNSL Kinsale Capital Group
Time series to forecast n: 09 Nov 2022 for (n+1 year)

According to price forecasts for (n+1 year) period: The dominant strategy among neural network is to Buy KNSL 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 Kinsale Capital Group

1. The underlying pool must contain one or more instruments that have contractual cash flows that are solely payments of principal and interest on the principal amount outstanding
2. It would not be acceptable to designate only some of the financial assets and financial liabilities giving rise to the inconsistency as at fair value through profit or loss if to do so would not eliminate or significantly reduce the inconsistency and would therefore not result in more relevant information. However, it would be acceptable to designate only some of a number of similar financial assets or similar financial liabilities if doing so achieves a significant reduction (and possibly a greater reduction than other allowable designations) in the inconsistency. For example, assume an entity has a number of similar financial liabilities that sum to CU100 and a number of similar financial assets that sum to CU50 but are measured on a different basis. The entity may significantly reduce the measurement inconsistency by designating at initial recognition all of the assets but only some of the liabilities (for example, individual liabilities with a combined total of CU45) as at fair value through profit or loss. However, because designation as at fair value through profit or loss can be applied only to the whole of a financial instrument, the entity in this example must designate one or more liabilities in their entirety. It could not designate either a component of a liability (eg changes in value attributable to only one risk, such as changes in a benchmark interest rate) or a proportion (ie percentage) of a liability.
3. The assessment of whether an economic relationship exists includes an analysis of the possible behaviour of the hedging relationship during its term to ascertain whether it can be expected to meet the risk management objective. The mere existence of a statistical correlation between two variables does not, by itself, support a valid conclusion that an economic relationship exists.
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

Kinsale Capital Group assigned short-term Ba3 & long-term Ba3 forecasted stock rating. We evaluate the prediction models Supervised Machine Learning (ML) with Sign Test^1,2,3,4 and conclude that the KNSL stock is predictable in the short/long term. According to price forecasts for (n+1 year) period: The dominant strategy among neural network is to Buy KNSL stock.

Financial State Forecast for KNSL Kinsale Capital Group Stock Options & Futures

Rating	Short-Term	Long-Term Senior
Outlook*	Ba3	Ba3
Operational Risk	65	45
Market Risk	56	62
Technical Analysis	51	42
Fundamental Analysis	69	85
Risk Unsystematic	80	78

Prediction Confidence Score

Trust metric by Neural Network: 79 out of 100 with 654 signals.

References

1. F. A. Oliehoek and C. Amato. A Concise Introduction to Decentralized POMDPs. SpringerBriefs in Intelligent Systems. Springer, 2016
2. V. Borkar. An actor-critic algorithm for constrained Markov decision processes. Systems & Control Letters, 54(3):207–213, 2005.
3. Chamberlain G. 2000. Econometrics and decision theory. J. Econom. 95:255–83
4. Bessler, D. A. T. Covey (1991), "Cointegration: Some results on U.S. cattle prices," Journal of Futures Markets, 11, 461–474.
5. V. Borkar and R. Jain. Risk-constrained Markov decision processes. IEEE Transaction on Automatic Control, 2014
6. A. K. Agogino and K. Tumer. Analyzing and visualizing multiagent rewards in dynamic and stochastic environments. Journal of Autonomous Agents and Multi-Agent Systems, 17(2):320–338, 2008
7. Athey S, Wager S. 2017. Efficient policy learning. arXiv:1702.02896 [math.ST]

Frequently Asked Questions

Q: What is the prediction methodology for KNSL stock?
A: KNSL stock prediction methodology: We evaluate the prediction models Supervised Machine Learning (ML) and Sign Test
Q: Is KNSL stock a buy or sell?
A: The dominant strategy among neural network is to Buy KNSL Stock.
Q: Is Kinsale Capital Group stock a good investment?
A: The consensus rating for Kinsale Capital Group is Buy and assigned short-term Ba3 & long-term Ba3 forecasted stock rating.
Q: What is the consensus rating of KNSL stock?
A: The consensus rating for KNSL is Buy.
Q: What is the prediction period for KNSL stock?
A: The prediction period for KNSL is (n+1 year)

Premium

• Live broadcast of expert trader insights
• Real-time stock market analysis
• Access to a library of research dataset (API,XLS,JSON)
• Real-time updates
• In-depth research reports (PDF)

Login