Does algo trading work? (RSG Stock Forecast)

Neural networks, as an intelligent data mining method, have been used in many different challenging pattern recognition problems such as stock market prediction. However, there is no formal method to determine the optimal neural network for prediction purpose in the literature. In this paper, two kinds of neural networks, a feed forward multi layer Perceptron (MLP) and an Elman recurrent network, are used to predict a company's stock value based on its stock share value history. We evaluate Republic Services prediction models with Modular Neural Network (Market News Sentiment Analysis) and Spearman Correlation^1,2,3,4 and conclude that the RSG stock is predictable in the short/long term. According to price forecasts for (n+3 month) period: The dominant strategy among neural network is to Hold RSG stock.

Keywords: RSG, Republic Services, stock forecast, machine learning based prediction, risk rating, buy-sell behaviour, stock analysis, target price analysis, options and futures.

Key Points

1. How do predictive algorithms actually work?
2. What are the most successful trading algorithms?
3. Market Risk

RSG Target Price Prediction Modeling Methodology

Stock market prediction is the act of trying to determine the future value of a company stock or other financial instrument traded on a financial exchange. The successful prediction of a stock's future price will maximize investor's gains. This paper proposes a machine learning model to predict stock market price. We consider Republic Services Stock Decision Process with Spearman Correlation where A is the set of discrete actions of RSG 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(Spearman Correlation)^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 (Market News Sentiment Analysis)) X S(n):→ (n+3 month) $\sum _{i=1}^n\left(r_i\right)$

n:Time series to forecast

p:Price signals of RSG 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?

RSG Stock Forecast (Buy or Sell) for (n+3 month)

Sample Set: Neural Network
Stock/Index: RSG Republic Services
Time series to forecast n: 06 Nov 2022 for (n+3 month)

According to price forecasts for (n+3 month) period: The dominant strategy among neural network is to Hold RSG 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 Republic Services

1. The purpose of estimating expected credit losses is neither to estimate a worstcase scenario nor to estimate the best-case scenario. Instead, an estimate of expected credit losses shall always reflect the possibility that a credit loss occurs and the possibility that no credit loss occurs even if the most likely outcome is no credit loss.
2. As with all fair value measurements, an entity's measurement method for determining the portion of the change in the liability's fair value that is attributable to changes in its credit risk must make maximum use of relevant observable inputs and minimum use of unobservable inputs.
3. There is a rebuttable presumption that unless inflation risk is contractually specified, it is not separately identifiable and reliably measurable and hence cannot be designated as a risk component of a financial instrument. However, in limited cases, it is possible to identify a risk component for inflation risk that is separately identifiable and reliably measurable because of the particular circumstances of the inflation environment and the relevant debt market
4. Adjusting the hedge ratio by increasing the volume of the hedging instrument does not affect how the changes in the value of the hedged item are measured. The measurement of the changes in the fair value of the hedging instrument related to the previously designated volume also remains unaffected. However, from the date of rebalancing, the changes in the fair value of the hedging instrument also include the changes in the value of the additional volume of the hedging instrument. The changes are measured starting from, and by reference to, the date of rebalancing instead of the date on which the hedging relationship was designated. For example, if an entity originally hedged the price risk of a commodity using a derivative volume of 100 tonnes as the hedging instrument and added a volume of 10 tonnes on rebalancing, the hedging instrument after rebalancing would comprise a total derivative volume of 110 tonnes. The change in the fair value of the hedging instrument is the total change in the fair value of the derivatives that make up the total volume of 110 tonnes. These derivatives could (and probably would) have different critical terms, such as their forward rates, because they were entered into at different points in time (including the possibility of designating derivatives into hedging relationships after their initial recognition).

*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

Republic Services assigned short-term B3 & long-term Ba1 forecasted stock rating. We evaluate the prediction models Modular Neural Network (Market News Sentiment Analysis) with Spearman Correlation^1,2,3,4 and conclude that the RSG stock is predictable in the short/long term. According to price forecasts for (n+3 month) period: The dominant strategy among neural network is to Hold RSG stock.

Financial State Forecast for RSG Republic Services Stock Options & Futures

Rating	Short-Term	Long-Term Senior
Outlook*	B3	Ba1
Operational Risk	35	79
Market Risk	37	49
Technical Analysis	43	55
Fundamental Analysis	58	89
Risk Unsystematic	75	86

Prediction Confidence Score

Trust metric by Neural Network: 90 out of 100 with 747 signals.

References

1. Belsley, D. A. (1988), "Modelling and forecast reliability," International Journal of Forecasting, 4, 427–447.
2. J. Baxter and P. Bartlett. Infinite-horizon policy-gradient estimation. Journal of Artificial Intelligence Re- search, 15:319–350, 2001.
3. Athey S, Mobius MM, Pál J. 2017c. The impact of aggregators on internet news consumption. Unpublished manuscript, Grad. School Bus., Stanford Univ., Stanford, CA
4. Dimakopoulou M, Athey S, Imbens G. 2017. Estimation considerations in contextual bandits. arXiv:1711.07077 [stat.ML]
5. J. Ott. A Markov decision model for a surveillance application and risk-sensitive Markov decision processes. PhD thesis, Karlsruhe Institute of Technology, 2010.
6. Chen X. 2007. Large sample sieve estimation of semi-nonparametric models. In Handbook of Econometrics, Vol. 6B, ed. JJ Heckman, EE Learner, pp. 5549–632. Amsterdam: Elsevier
7. M. Colby, T. Duchow-Pressley, J. J. Chung, and K. Tumer. Local approximation of difference evaluation functions. In Proceedings of the Fifteenth International Joint Conference on Autonomous Agents and Multiagent Systems, Singapore, May 2016

Frequently Asked Questions

Q: What is the prediction methodology for RSG stock?
A: RSG stock prediction methodology: We evaluate the prediction models Modular Neural Network (Market News Sentiment Analysis) and Spearman Correlation
Q: Is RSG stock a buy or sell?
A: The dominant strategy among neural network is to Hold RSG Stock.
Q: Is Republic Services stock a good investment?
A: The consensus rating for Republic Services is Hold and assigned short-term B3 & long-term Ba1 forecasted stock rating.
Q: What is the consensus rating of RSG stock?
A: The consensus rating for RSG is Hold.
Q: What is the prediction period for RSG stock?
A: The prediction period for RSG is (n+3 month)

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