Credit Acceptance Research Report

Summary

Recently, a lot of interesting work has been done in the area of applying Machine Learning Algorithms for analyzing price patterns and predicting stock prices and index changes. Most stock traders nowadays depend on Intelligent Trading Systems which help them in predicting prices based on various situations and conditions, thereby helping them in making instantaneous investment decisions. We evaluate Credit Acceptance prediction models with Supervised Machine Learning (ML) and Logistic Regression1,2,3,4 and conclude that the CACC 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 Hold CACC stock.

Key Points

1. Stock Forecast Based On a Predictive Algorithm
2. Can we predict stock market using machine learning?
3. What is a prediction confidence?

CACC Target Price Prediction Modeling Methodology

We consider Credit Acceptance Stock Decision Process with Supervised Machine Learning (ML) where A is the set of discrete actions of CACC 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(Logistic Regression)5,6,7= $\begin{array}{cccc}{p}_{a1}& {p}_{a2}& \dots & {p}_{1n}\\ & ⋮\\ {p}_{j1}& {p}_{j2}& \dots & {p}_{jn}\\ & ⋮\\ {p}_{k1}& {p}_{k2}& \dots & {p}_{kn}\\ & ⋮\\ {p}_{n1}& {p}_{n2}& \dots & {p}_{nn}\end{array}$ 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 CACC 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?

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

Sample Set: Neural Network
Stock/Index: CACC Credit Acceptance
Time series to forecast n: 21 Nov 2022 for (n+1 year)

According to price forecasts for (n+1 year) period: The dominant strategy among neural network is to Hold CACC 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 Credit Acceptance

1. For loan commitments, an entity considers changes in the risk of a default occurring on the loan to which a loan commitment relates. For financial guarantee contracts, an entity considers the changes in the risk that the specified debtor will default on the contract.
2. To the extent that a transfer of a financial asset does not qualify for derecognition, the transferor's contractual rights or obligations related to the transfer are not accounted for separately as derivatives if recognising both the derivative and either the transferred asset or the liability arising from the transfer would result in recognising the same rights or obligations twice. For example, a call option retained by the transferor may prevent a transfer of financial assets from being accounted for as a sale. In that case, the call option is not separately recognised as a derivative asset.
3. Paragraph 6.3.4 permits an entity to designate as hedged items aggregated exposures that are a combination of an exposure and a derivative. When designating such a hedged item, an entity assesses whether the aggregated exposure combines an exposure with a derivative so that it creates a different aggregated exposure that is managed as one exposure for a particular risk (or risks). In that case, the entity may designate the hedged item on the basis of the aggregated exposure
4. An entity is not required to restate prior periods to reflect the application of these amendments. The entity may restate prior periods only if it is possible to do so without the use of hindsight. If an entity restates prior periods, the restated financial statements must reflect all the requirements in this Standard for the affected financial instruments. If an entity does not restate prior periods, the entity shall recognise any difference between the previous carrying amount and the carrying amount at the beginning of the annual reporting period that includes the date of initial application of these amendments in the opening retained earnings (or other component of equity, as appropriate) of the annual reporting period that includes the date of initial application of these amendments.

*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

Credit Acceptance assigned short-term B3 & long-term B2 forecasted stock rating. We evaluate the prediction models Supervised Machine Learning (ML) with Logistic Regression1,2,3,4 and conclude that the CACC 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 Hold CACC stock.

Financial State Forecast for CACC Credit Acceptance Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B3B2
Operational Risk 5842
Market Risk4459
Technical Analysis4477
Fundamental Analysis4937
Risk Unsystematic3735

Prediction Confidence Score

Trust metric by Neural Network: 75 out of 100 with 630 signals.

References

1. Ashley, R. (1983), "On the usefulness of macroeconomic forecasts as inputs to forecasting models," Journal of Forecasting, 2, 211–223.
2. C. Claus and C. Boutilier. The dynamics of reinforcement learning in cooperative multiagent systems. In Proceedings of the Fifteenth National Conference on Artificial Intelligence and Tenth Innovative Applications of Artificial Intelligence Conference, AAAI 98, IAAI 98, July 26-30, 1998, Madison, Wisconsin, USA., pages 746–752, 1998.
3. Andrews, D. W. K. W. Ploberger (1994), "Optimal tests when a nuisance parameter is present only under the alternative," Econometrica, 62, 1383–1414.
4. Abadie A, Diamond A, Hainmueller J. 2015. Comparative politics and the synthetic control method. Am. J. Political Sci. 59:495–510
5. Athey S, Blei D, Donnelly R, Ruiz F. 2017b. Counterfactual inference for consumer choice across many prod- uct categories. AEA Pap. Proc. 108:64–67
6. K. Tuyls and G. Weiss. Multiagent learning: Basics, challenges, and prospects. AI Magazine, 33(3): 41–52, 2012
7. Gentzkow M, Kelly BT, Taddy M. 2017. Text as data. NBER Work. Pap. 23276
Frequently Asked QuestionsQ: What is the prediction methodology for CACC stock?
A: CACC stock prediction methodology: We evaluate the prediction models Supervised Machine Learning (ML) and Logistic Regression
Q: Is CACC stock a buy or sell?
A: The dominant strategy among neural network is to Hold CACC Stock.
Q: Is Credit Acceptance stock a good investment?
A: The consensus rating for Credit Acceptance is Hold and assigned short-term B3 & long-term B2 forecasted stock rating.
Q: What is the consensus rating of CACC stock?
A: The consensus rating for CACC is Hold.
Q: What is the prediction period for CACC stock?
A: The prediction period for CACC is (n+1 year)

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