Modelling A.I. in Economics

How Is Machine Learning Used in Trading? (FIS Stock Forecast)

Stock markets are affected by many uncertainties and interrelated economic and political factors at both local and global levels. The key to successful stock market forecasting is achieving best results with minimum required input data. To determine the set of relevant factors for making accurate predictions is a complicated task and so regular stock market analysis is very essential. More specifically, the stock market's movements are analyzed and predicted in order to retrieve knowledge that could guide investors on when to buy and sell. We evaluate FIS prediction models with Modular Neural Network (Emotional Trigger/Responses Analysis) and Wilcoxon Sign-Rank Test1,2,3,4 and conclude that the FIS 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 FIS stock.


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

Key Points

  1. Operational Risk
  2. Which neural network is best for prediction?
  3. What is prediction model?

FIS Target Price Prediction Modeling Methodology

In this paper a Bayesian regularized artificial neural network is proposed as a novel method to forecast financial market behavior. Daily market prices and financial technical indicators are utilized as inputs to predict the one day future closing price of individual stocks. The prediction of stock price movement is generally considered to be a challenging and important task for financial time series analysis. We consider FIS Stock Decision Process with Wilcoxon Sign-Rank Test where A is the set of discrete actions of FIS 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(Wilcoxon Sign-Rank Test)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 (Emotional Trigger/Responses Analysis)) X S(n):→ (n+8 weeks) i = 1 n r i

n:Time series to forecast

p:Price signals of FIS 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?

FIS Stock Forecast (Buy or Sell) for (n+8 weeks)


Sample Set: Neural Network
Stock/Index: FIS FIS
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 FIS 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 FIS

  1. The accounting for the time value of options in accordance with paragraph 6.5.15 applies only to the extent that the time value relates to the hedged item (aligned time value). The time value of an option relates to the hedged item if the critical terms of the option (such as the nominal amount, life and underlying) are aligned with the hedged item. Hence, if the critical terms of the option and the hedged item are not fully aligned, an entity shall determine the aligned time value, ie how much of the time value included in the premium (actual time value) relates to the hedged item (and therefore should be treated in accordance with paragraph 6.5.15). An entity determines the aligned time value using the valuation of the option that would have critical terms that perfectly match the hedged item.
  2. An entity's documentation of the hedging relationship includes how it will assess the hedge effectiveness requirements, including the method or methods used. The documentation of the hedging relationship shall be updated for any changes to the methods (see paragraph B6.4.17).
  3. The requirement that an economic relationship exists means that the hedging instrument and the hedged item have values that generally move in the opposite direction because of the same risk, which is the hedged risk. Hence, there must be an expectation that the value of the hedging instrument and the value of the hedged item will systematically change in response to movements in either the same underlying or underlyings that are economically related in such a way that they respond in a similar way to the risk that is being hedged (for example, Brent and WTI crude oil).
  4. An example of a fair value hedge is a hedge of exposure to changes in the fair value of a fixed-rate debt instrument arising from changes in interest rates. Such a hedge could be entered into by the issuer or by the holder.

*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

FIS assigned short-term B1 & long-term Ba3 forecasted stock rating. We evaluate the prediction models Modular Neural Network (Emotional Trigger/Responses Analysis) with Wilcoxon Sign-Rank Test1,2,3,4 and conclude that the FIS 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 FIS stock.

Financial State Forecast for FIS FIS Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B1Ba3
Operational Risk 7580
Market Risk7663
Technical Analysis6578
Fundamental Analysis4950
Risk Unsystematic4153

Prediction Confidence Score

Trust metric by Neural Network: 84 out of 100 with 611 signals.

References

  1. Vapnik V. 2013. The Nature of Statistical Learning Theory. Berlin: Springer
  2. J. Ott. A Markov decision model for a surveillance application and risk-sensitive Markov decision processes. PhD thesis, Karlsruhe Institute of Technology, 2010.
  3. B. Derfer, N. Goodyear, K. Hung, C. Matthews, G. Paoni, K. Rollins, R. Rose, M. Seaman, and J. Wiles. Online marketing platform, August 17 2007. US Patent App. 11/893,765
  4. H. Khalil and J. Grizzle. Nonlinear systems, volume 3. Prentice hall Upper Saddle River, 2002.
  5. Christou, C., P. A. V. B. Swamy G. S. Tavlas (1996), "Modelling optimal strategies for the allocation of wealth in multicurrency investments," International Journal of Forecasting, 12, 483–493.
  6. Athey S, Tibshirani J, Wager S. 2016b. Generalized random forests. arXiv:1610.01271 [stat.ME]
  7. Belsley, D. A. (1988), "Modelling and forecast reliability," International Journal of Forecasting, 4, 427–447.
Frequently Asked QuestionsQ: What is the prediction methodology for FIS stock?
A: FIS stock prediction methodology: We evaluate the prediction models Modular Neural Network (Emotional Trigger/Responses Analysis) and Wilcoxon Sign-Rank Test
Q: Is FIS stock a buy or sell?
A: The dominant strategy among neural network is to Hold FIS Stock.
Q: Is FIS stock a good investment?
A: The consensus rating for FIS is Hold and assigned short-term B1 & long-term Ba3 forecasted stock rating.
Q: What is the consensus rating of FIS stock?
A: The consensus rating for FIS is Hold.
Q: What is the prediction period for FIS stock?
A: The prediction period for FIS is (n+8 weeks)

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