How Do You Pick a Stock? (LON:LIO Stock Forecast)

With the advent of technological marvels like global digitization, the prediction of the stock market has entered a technologically advanced era, revamping the old model of trading. With the ceaseless increase in market capitalization, stock trading has become a center of investment for many financial investors. Many analysts and researchers have developed tools and techniques that predict stock price movements and help investors in proper decision-making. We evaluate LIONTRUST ASSET MANAGEMENT PLC prediction models with Modular Neural Network (Speculative Sentiment Analysis) and Lasso Regression1,2,3,4 and conclude that the LON:LIO stock is predictable in the short/long term. According to price forecasts for (n+4 weeks) period: The dominant strategy among neural network is to Hold LON:LIO stock.


Keywords: LON:LIO, LIONTRUST ASSET MANAGEMENT PLC, stock forecast, machine learning based prediction, risk rating, buy-sell behaviour, stock analysis, target price analysis, options and futures.

Key Points

  1. Can neural networks predict stock market?
  2. Market Risk
  3. How can neural networks improve predictions?

LON:LIO Target Price Prediction Modeling Methodology

Development of linguistic technologies and penetration of social media provide powerful possibilities to investigate users' moods and psychological states of people. In this paper we discussed possibility to improve accuracy of stock market indicators predictions by using data about psychological states of Twitter users. For analysis of psychological states we used lexicon-based approach. We consider LIONTRUST ASSET MANAGEMENT PLC Stock Decision Process with Lasso Regression where A is the set of discrete actions of LON:LIO 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(Lasso 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 (Speculative Sentiment Analysis)) X S(n):→ (n+4 weeks) i = 1 n r i

n:Time series to forecast

p:Price signals of LON:LIO 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:LIO Stock Forecast (Buy or Sell) for (n+4 weeks)


Sample Set: Neural Network
Stock/Index: LON:LIO LIONTRUST ASSET MANAGEMENT PLC
Time series to forecast n: 13 Nov 2022 for (n+4 weeks)

According to price forecasts for (n+4 weeks) period: The dominant strategy among neural network is to Hold LON:LIO 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 LIONTRUST ASSET MANAGEMENT PLC

  1. An entity's business model refers to how an entity manages its financial assets in order to generate cash flows. That is, the entity's business model determines whether cash flows will result from collecting contractual cash flows, selling financial assets or both. Consequently, this assessment is not performed on the basis of scenarios that the entity does not reasonably expect to occur, such as so-called 'worst case' or 'stress case' scenarios. For example, if an entity expects that it will sell a particular portfolio of financial assets only in a stress case scenario, that scenario would not affect the entity's assessment of the business model for those assets if the entity reasonably expects that such a scenario will not occur. If cash flows are realised in a way that is different from the entity's expectations at the date that the entity assessed the business model (for example, if the entity sells more or fewer financial assets than it expected when it classified the assets), that does not give rise to a prior period error in the entity's financial statements (see IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors) nor does it change the classification of the remaining financial assets held in that business model (ie those assets that the entity recognised in prior periods and still holds) as long as the entity considered all relevant information that was available at the time that it made the business model assessment.
  2. Paragraph 5.7.5 permits an entity to make an irrevocable election to present in other comprehensive income subsequent changes in the fair value of particular investments in equity instruments. Such an investment is not a monetary item. Accordingly, the gain or loss that is presented in other comprehensive income in accordance with paragraph 5.7.5 includes any related foreign exchange component.
  3. Fluctuation around a constant hedge ratio (and hence the related hedge ineffectiveness) cannot be reduced by adjusting the hedge ratio in response to each particular outcome. Hence, in such circumstances, the change in the extent of offset is a matter of measuring and recognising hedge ineffectiveness but does not require rebalancing.
  4. Despite the requirement in paragraph 7.2.1, an entity that adopts the classification and measurement requirements of this Standard (which include the requirements related to amortised cost measurement for financial assets and impairment in Sections 5.4 and 5.5) shall provide the disclosures set out in paragraphs 42L–42O of IFRS 7 but need not restate prior periods. The entity may restate prior periods if, and only if, it is possible without the use of hindsight. 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 in the opening retained earnings (or other component of equity, as appropriate) of the annual reporting period that includes the date of initial application. However, if an entity restates prior periods, the restated financial statements must reflect all of the requirements in this Standard. If an entity's chosen approach to applying IFRS 9 results in more than one date of initial application for different requirements, this paragraph applies at each date of initial application (see paragraph 7.2.2). This would be the case, for example, if an entity elects to early apply only the requirements for the presentation of gains and losses on financial liabilities designated as at fair value through profit or loss in accordance with paragraph 7.1.2 before applying the other requirements in this Standard.

*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

LIONTRUST ASSET MANAGEMENT PLC assigned short-term B2 & long-term B1 forecasted stock rating. We evaluate the prediction models Modular Neural Network (Speculative Sentiment Analysis) with Lasso Regression1,2,3,4 and conclude that the LON:LIO stock is predictable in the short/long term. According to price forecasts for (n+4 weeks) period: The dominant strategy among neural network is to Hold LON:LIO stock.

Financial State Forecast for LON:LIO LIONTRUST ASSET MANAGEMENT PLC Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B2B1
Operational Risk 4786
Market Risk5766
Technical Analysis3977
Fundamental Analysis6737
Risk Unsystematic7432

Prediction Confidence Score

Trust metric by Neural Network: 77 out of 100 with 830 signals.

References

  1. Candès EJ, Recht B. 2009. Exact matrix completion via convex optimization. Found. Comput. Math. 9:717
  2. S. Bhatnagar and K. Lakshmanan. An online actor-critic algorithm with function approximation for con- strained Markov decision processes. Journal of Optimization Theory and Applications, 153(3):688–708, 2012.
  3. Scott SL. 2010. A modern Bayesian look at the multi-armed bandit. Appl. Stoch. Models Bus. Ind. 26:639–58
  4. Thompson WR. 1933. On the likelihood that one unknown probability exceeds another in view of the evidence of two samples. Biometrika 25:285–94
  5. E. Collins. Using Markov decision processes to optimize a nonlinear functional of the final distribution, with manufacturing applications. In Stochastic Modelling in Innovative Manufacturing, pages 30–45. Springer, 1997
  6. G. Konidaris, S. Osentoski, and P. Thomas. Value function approximation in reinforcement learning using the Fourier basis. In AAAI, 2011
  7. Wan M, Wang D, Goldman M, Taddy M, Rao J, et al. 2017. Modeling consumer preferences and price sensitiv- ities from large-scale grocery shopping transaction logs. In Proceedings of the 26th International Conference on the World Wide Web, pp. 1103–12. New York: ACM
Frequently Asked QuestionsQ: What is the prediction methodology for LON:LIO stock?
A: LON:LIO stock prediction methodology: We evaluate the prediction models Modular Neural Network (Speculative Sentiment Analysis) and Lasso Regression
Q: Is LON:LIO stock a buy or sell?
A: The dominant strategy among neural network is to Hold LON:LIO Stock.
Q: Is LIONTRUST ASSET MANAGEMENT PLC stock a good investment?
A: The consensus rating for LIONTRUST ASSET MANAGEMENT PLC is Hold and assigned short-term B2 & long-term B1 forecasted stock rating.
Q: What is the consensus rating of LON:LIO stock?
A: The consensus rating for LON:LIO is Hold.
Q: What is the prediction period for LON:LIO stock?
A: The prediction period for LON:LIO is (n+4 weeks)

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