Does algo trading work? (OEL Stock Forecast)

OTTO ENERGY LIMITED Research Report

Summary

Stock market is considered chaotic, complex, volatile and dynamic. Undoubtedly, its prediction is one of the most challenging tasks in time series forecasting. Moreover existing Artificial Neural Network (ANN) approaches fail to provide encouraging results. Meanwhile advances in machine learning have presented favourable results for speech recognition, image classification and language processing. We evaluate OTTO ENERGY LIMITED prediction models with Modular Neural Network (CNN Layer) and ElasticNet Regression^1,2,3,4 and conclude that the OEL 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 Buy OEL stock.

Key Points

1. Operational Risk
2. What is Markov decision process in reinforcement learning?
3. Reaction Function

OEL Target Price Prediction Modeling Methodology

We consider OTTO ENERGY LIMITED Stock Decision Process with Modular Neural Network (CNN Layer) where A is the set of discrete actions of OEL 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(ElasticNet 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 (CNN Layer)) X S(n):→ (n+16 weeks) $\begin{array}{l}\int e^x\mathrm{rx}\end{array}$

n:Time series to forecast

p:Price signals of OEL 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?

OEL Stock Forecast (Buy or Sell) for (n+16 weeks)

Sample Set: Neural Network
Stock/Index: OEL OTTO ENERGY LIMITED
Time series to forecast n: 23 Nov 2022 for (n+16 weeks)

According to price forecasts for (n+16 weeks) period: The dominant strategy among neural network is to Buy OEL 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 OTTO ENERGY LIMITED

1. When defining default for the purposes of determining the risk of a default occurring, an entity shall apply a default definition that is consistent with the definition used for internal credit risk management purposes for the relevant financial instrument and consider qualitative indicators (for example, financial covenants) when appropriate. However, there is a rebuttable presumption that default does not occur later than when a financial asset is 90 days past due unless an entity has reasonable and supportable information to demonstrate that a more lagging default criterion is more appropriate. The definition of default used for these purposes shall be applied consistently to all financial instruments unless information becomes available that demonstrates that another default definition is more appropriate for a particular financial instrument.
2. If a component of the cash flows of a financial or a non-financial item is designated as the hedged item, that component must be less than or equal to the total cash flows of the entire item. However, all of the cash flows of the entire item may be designated as the hedged item and hedged for only one particular risk (for example, only for those changes that are attributable to changes in LIBOR or a benchmark commodity price).
3. If a variable-rate financial liability bears interest of (for example) three-month LIBOR minus 20 basis points (with a floor at zero basis points), an entity can designate as the hedged item the change in the cash flows of that entire liability (ie three-month LIBOR minus 20 basis points—including the floor) that is attributable to changes in LIBOR. Hence, as long as the three-month LIBOR forward curve for the remaining life of that liability does not fall below 20 basis points, the hedged item has the same cash flow variability as a liability that bears interest at three-month LIBOR with a zero or positive spread. However, if the three-month LIBOR forward curve for the remaining life of that liability (or a part of it) falls below 20 basis points, the hedged item has a lower cash flow variability than a liability that bears interest at threemonth LIBOR with a zero or positive spread.
4. If a variable-rate financial liability bears interest of (for example) three-month LIBOR minus 20 basis points (with a floor at zero basis points), an entity can designate as the hedged item the change in the cash flows of that entire liability (ie three-month LIBOR minus 20 basis points—including the floor) that is attributable to changes in LIBOR. Hence, as long as the three-month LIBOR forward curve for the remaining life of that liability does not fall below 20 basis points, the hedged item has the same cash flow variability as a liability that bears interest at three-month LIBOR with a zero or positive spread. However, if the three-month LIBOR forward curve for the remaining life of that liability (or a part of it) falls below 20 basis points, the hedged item has a lower cash flow variability than a liability that bears interest at threemonth LIBOR with a zero or positive spread.

*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

OTTO ENERGY LIMITED assigned short-term B2 & long-term Ba3 forecasted stock rating. We evaluate the prediction models Modular Neural Network (CNN Layer) with ElasticNet Regression^1,2,3,4 and conclude that the OEL 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 Buy OEL stock.

Financial State Forecast for OEL OTTO ENERGY LIMITED Stock Options & Futures

Rating	Short-Term	Long-Term Senior
Outlook*	B2	Ba3
Operational Risk	79	55
Market Risk	43	47
Technical Analysis	44	55
Fundamental Analysis	72	83
Risk Unsystematic	50	70

Prediction Confidence Score

Trust metric by Neural Network: 81 out of 100 with 586 signals.

References

1. Mnih A, Teh YW. 2012. A fast and simple algorithm for training neural probabilistic language models. In Proceedings of the 29th International Conference on Machine Learning, pp. 419–26. La Jolla, CA: Int. Mach. Learn. Soc.
2. D. Bertsekas. Nonlinear programming. Athena Scientific, 1999.
3. Chernozhukov V, Demirer M, Duflo E, Fernandez-Val I. 2018b. Generic machine learning inference on heteroge- nous treatment effects in randomized experiments. NBER Work. Pap. 24678
4. M. J. Hausknecht. Cooperation and Communication in Multiagent Deep Reinforcement Learning. PhD thesis, The University of Texas at Austin, 2016
5. Bickel P, Klaassen C, Ritov Y, Wellner J. 1998. Efficient and Adaptive Estimation for Semiparametric Models. Berlin: Springer
6. Breiman L. 2001b. Statistical modeling: the two cultures (with comments and a rejoinder by the author). Stat. Sci. 16:199–231
7. R. Sutton and A. Barto. Reinforcement Learning. The MIT Press, 1998

Frequently Asked Questions

Q: What is the prediction methodology for OEL stock?
A: OEL stock prediction methodology: We evaluate the prediction models Modular Neural Network (CNN Layer) and ElasticNet Regression
Q: Is OEL stock a buy or sell?
A: The dominant strategy among neural network is to Buy OEL Stock.
Q: Is OTTO ENERGY LIMITED stock a good investment?
A: The consensus rating for OTTO ENERGY LIMITED is Buy and assigned short-term B2 & long-term Ba3 forecasted stock rating.
Q: What is the consensus rating of OEL stock?
A: The consensus rating for OEL is Buy.
Q: What is the prediction period for OEL stock?
A: The prediction period for OEL is (n+16 weeks)

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