How Do You Pick a Stock? (GFS Stock Forecast)

GlobalFoundries Research Report

Summary

Prediction of future movement of stock prices has been a subject matter of many research work. There is a gamut of literature of technical analysis of stock prices where the objective is to identify patterns in stock price movements and derive profit from it. Improving the prediction accuracy remains the single most challenge in this area of research. We propose a hybrid approach for stock price movement prediction using machine learning, deep learning, and natural language processing. We evaluate GlobalFoundries prediction models with Modular Neural Network (Market Direction Analysis) and Polynomial Regression1,2,3,4 and conclude that the GFS 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 GFS stock.

Key Points

  1. How do you decide buy or sell a stock?
  2. Stock Rating
  3. Nash Equilibria

GFS Target Price Prediction Modeling Methodology

We consider GlobalFoundries Stock Decision Process with Modular Neural Network (Market Direction Analysis) where A is the set of discrete actions of GFS 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(Polynomial 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(Modular Neural Network (Market Direction Analysis)) X S(n):→ (n+1 year) i = 1 n a i

n:Time series to forecast

p:Price signals of GFS 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?

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

Sample Set: Neural Network
Stock/Index: GFS GlobalFoundries
Time series to forecast n: 20 Nov 2022 for (n+1 year)

According to price forecasts for (n+1 year) period: The dominant strategy among neural network is to Buy GFS 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 GlobalFoundries

  1. The fact that a derivative is in or out of the money when it is designated as a hedging instrument does not in itself mean that a qualitative assessment is inappropriate. It depends on the circumstances whether hedge ineffectiveness arising from that fact could have a magnitude that a qualitative assessment would not adequately capture.
  2. When rebalancing a hedging relationship, an entity shall update its analysis of the sources of hedge ineffectiveness that are expected to affect the hedging relationship during its (remaining) term (see paragraph B6.4.2). The documentation of the hedging relationship shall be updated accordingly.
  3. A regular way purchase or sale gives rise to a fixed price commitment between trade date and settlement date that meets the definition of a derivative. However, because of the short duration of the commitment it is not recognised as a derivative financial instrument. Instead, this Standard provides for special accounting for such regular way contracts (see paragraphs 3.1.2 and B3.1.3–B3.1.6).
  4. If an entity previously accounted for a derivative liability that is linked to, and must be settled by, delivery of an equity instrument that does not have a quoted price in an active market for an identical instrument (ie a Level 1 input) at cost in accordance with IAS 39, it shall measure that derivative liability at fair value at the date of initial application. Any difference between the previous carrying amount and the fair value shall be recognised in the opening retained earnings of the reporting period that includes the date of initial application.

*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

GlobalFoundries assigned short-term B2 & long-term B1 forecasted stock rating. We evaluate the prediction models Modular Neural Network (Market Direction Analysis) with Polynomial Regression1,2,3,4 and conclude that the GFS 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 GFS stock.

Financial State Forecast for GFS GlobalFoundries Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B2B1
Operational Risk 4066
Market Risk3566
Technical Analysis6581
Fundamental Analysis8836
Risk Unsystematic5751

Prediction Confidence Score

Trust metric by Neural Network: 78 out of 100 with 671 signals.

References

  1. A. Shapiro, W. Tekaya, J. da Costa, and M. Soares. Risk neutral and risk averse stochastic dual dynamic programming method. European journal of operational research, 224(2):375–391, 2013
  2. L. Busoniu, R. Babuska, and B. D. Schutter. A comprehensive survey of multiagent reinforcement learning. IEEE Transactions of Systems, Man, and Cybernetics Part C: Applications and Reviews, 38(2), 2008.
  3. J. Harb and D. Precup. Investigating recurrence and eligibility traces in deep Q-networks. In Deep Reinforcement Learning Workshop, NIPS 2016, Barcelona, Spain, 2016.
  4. 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
  5. V. Borkar. Stochastic approximation: a dynamical systems viewpoint. Cambridge University Press, 2008
  6. D. S. Bernstein, S. Zilberstein, and N. Immerman. The complexity of decentralized control of Markov Decision Processes. In UAI '00: Proceedings of the 16th Conference in Uncertainty in Artificial Intelligence, Stanford University, Stanford, California, USA, June 30 - July 3, 2000, pages 32–37, 2000.
  7. Kitagawa T, Tetenov A. 2015. Who should be treated? Empirical welfare maximization methods for treatment choice. Tech. Rep., Cent. Microdata Methods Pract., Inst. Fiscal Stud., London
Frequently Asked QuestionsQ: What is the prediction methodology for GFS stock?
A: GFS stock prediction methodology: We evaluate the prediction models Modular Neural Network (Market Direction Analysis) and Polynomial Regression
Q: Is GFS stock a buy or sell?
A: The dominant strategy among neural network is to Buy GFS Stock.
Q: Is GlobalFoundries stock a good investment?
A: The consensus rating for GlobalFoundries is Buy and assigned short-term B2 & long-term B1 forecasted stock rating.
Q: What is the consensus rating of GFS stock?
A: The consensus rating for GFS is Buy.
Q: What is the prediction period for GFS stock?
A: The prediction period for GFS is (n+1 year)

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