Modelling A.I. in Economics

F&C INVESTMENT TRUST PLC Stock Forecast & Analysis (Forecast)

This paper examines the theory and practice of regression techniques for prediction of stock price trend by using a transformed data set in ordinal data format. The original pretransformed data source contains data of heterogeneous data types used for handling of currency values and financial ratios. The data formats in currency values and financial ratios provide a process for computation of stock prices. The transformed data set contains only a standardized ordinal data type which provides a process to measure rankings of stock price trends. We evaluate F&C INVESTMENT TRUST PLC prediction models with Supervised Machine Learning (ML) and Stepwise Regression1,2,3,4 and conclude that the LON:FCIT stock is predictable in the short/long term. According to price forecasts for (n+8 weeks) period: The dominant strategy among neural network is to Hold LON:FCIT stock.


Keywords: LON:FCIT, F&C INVESTMENT TRUST PLC, stock forecast, machine learning based prediction, risk rating, buy-sell behaviour, stock analysis, target price analysis, options and futures.

Key Points

  1. Market Signals
  2. Decision Making
  3. Buy, Sell and Hold Signals

LON:FCIT Target Price Prediction Modeling Methodology

The study of financial markets has been addressed in many works during the last years. Different methods have been used in order to capture the non-linear behavior which is characteristic of these complex systems. The development of profitable strategies has been associated with the predictive character of the market movement, and special attention has been devoted to forecast the trends of financial markets. We consider F&C INVESTMENT TRUST PLC Stock Decision Process with Stepwise Regression where A is the set of discrete actions of LON:FCIT 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(Stepwise Regression)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(Supervised Machine Learning (ML)) X S(n):→ (n+8 weeks) e x rx

n:Time series to forecast

p:Price signals of LON:FCIT 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:FCIT Stock Forecast (Buy or Sell) for (n+8 weeks)


Sample Set: Neural Network
Stock/Index: LON:FCIT F&C INVESTMENT TRUST PLC
Time series to forecast n: 10 Nov 2022 for (n+8 weeks)

According to price forecasts for (n+8 weeks) period: The dominant strategy among neural network is to Hold LON:FCIT 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 F&C INVESTMENT TRUST PLC

  1. Expected credit losses shall be discounted to the reporting date, not to the expected default or some other date, using the effective interest rate determined at initial recognition or an approximation thereof. If a financial instrument has a variable interest rate, expected credit losses shall be discounted using the current effective interest rate determined in accordance with paragraph B5.4.5.
  2. Changes in market conditions that give rise to market risk include changes in a benchmark interest rate, the price of another entity's financial instrument, a commodity price, a foreign exchange rate or an index of prices or rates.
  3. If a call option right retained by an entity prevents a transferred asset from being derecognised and the entity measures the transferred asset at fair value, the asset continues to be measured at its fair value. The associated liability is measured at (i) the option exercise price less the time value of the option if the option is in or at the money, or (ii) the fair value of the transferred asset less the time value of the option if the option is out of the money. The adjustment to the measurement of the associated liability ensures that the net carrying amount of the asset and the associated liability is the fair value of the call option right. For example, if the fair value of the underlying asset is CU80, the option exercise price is CU95 and the time value of the option is CU5, the carrying amount of the associated liability is CU75 (CU80 – CU5) and the carrying amount of the transferred asset is CU80 (ie its fair value)
  4. An entity can rebut this presumption. However, it can do so only when it has reasonable and supportable information available that demonstrates that even if contractual payments become more than 30 days past due, this does not represent a significant increase in the credit risk of a financial instrument. For example when non-payment was an administrative oversight, instead of resulting from financial difficulty of the borrower, or the entity has access to historical evidence that demonstrates that there is no correlation between significant increases in the risk of a default occurring and financial assets on which payments are more than 30 days past due, but that evidence does identify such a correlation when payments are more than 60 days past due.

*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

F&C INVESTMENT TRUST PLC assigned short-term B2 & long-term Ba2 forecasted stock rating. We evaluate the prediction models Supervised Machine Learning (ML) with Stepwise Regression1,2,3,4 and conclude that the LON:FCIT stock is predictable in the short/long term. According to price forecasts for (n+8 weeks) period: The dominant strategy among neural network is to Hold LON:FCIT stock.

Financial State Forecast for LON:FCIT F&C INVESTMENT TRUST PLC Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B2Ba2
Operational Risk 4881
Market Risk5333
Technical Analysis4161
Fundamental Analysis5480
Risk Unsystematic6678

Prediction Confidence Score

Trust metric by Neural Network: 80 out of 100 with 538 signals.

References

  1. Bell RM, Koren Y. 2007. Lessons from the Netflix prize challenge. ACM SIGKDD Explor. Newsl. 9:75–79
  2. Athey S. 2017. Beyond prediction: using big data for policy problems. Science 355:483–85
  3. Scholkopf B, Smola AJ. 2001. Learning with Kernels: Support Vector Machines, Regularization, Optimization, and Beyond. Cambridge, MA: MIT Press
  4. Y. Le Tallec. Robust, risk-sensitive, and data-driven control of Markov decision processes. PhD thesis, Massachusetts Institute of Technology, 2007.
  5. J. N. Foerster, Y. M. Assael, N. de Freitas, and S. Whiteson. Learning to communicate with deep multi-agent reinforcement learning. In Advances in Neural Information Processing Systems 29: Annual Conference on Neural Information Processing Systems 2016, December 5-10, 2016, Barcelona, Spain, pages 2137–2145, 2016.
  6. Tibshirani R. 1996. Regression shrinkage and selection via the lasso. J. R. Stat. Soc. B 58:267–88
  7. T. Morimura, M. Sugiyama, M. Kashima, H. Hachiya, and T. Tanaka. Nonparametric return distribution ap- proximation for reinforcement learning. In Proceedings of the 27th International Conference on Machine Learning, pages 799–806, 2010
Frequently Asked QuestionsQ: What is the prediction methodology for LON:FCIT stock?
A: LON:FCIT stock prediction methodology: We evaluate the prediction models Supervised Machine Learning (ML) and Stepwise Regression
Q: Is LON:FCIT stock a buy or sell?
A: The dominant strategy among neural network is to Hold LON:FCIT Stock.
Q: Is F&C INVESTMENT TRUST PLC stock a good investment?
A: The consensus rating for F&C INVESTMENT TRUST PLC is Hold and assigned short-term B2 & long-term Ba2 forecasted stock rating.
Q: What is the consensus rating of LON:FCIT stock?
A: The consensus rating for LON:FCIT is Hold.
Q: What is the prediction period for LON:FCIT stock?
A: The prediction period for LON:FCIT is (n+8 weeks)

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