*AC Investment Research empowers individual investors to make better trading decisions by providing machine learning based objective stock market analysis and forecast.

Is AL a Buy?

It has never been easy to invest in a set of assets, the abnormally of financial market does not allow simple models to predict future asset values with higher accuracy. Machine learning, which consist of making computers perform tasks that normally requiring human intelligence is currently the dominant trend in scientific research. This article aims to build a model using Recurrent Neural Networks (RNN) and especially Long-Short Term Memory model (LSTM) to predict future stock market values. We evaluate Air Lease Corporation prediction models with Modular Neural Network (DNN Layer) and Factor1,2,3,4 and conclude that the AL stock is predictable in the short/long term. According to price forecasts for (n+16 weeks) period: The dominant strategy among neural network is to Hold AL stock.

Key Points

  1. What is the best way to predict stock prices?
  2. Prediction Modeling
  3. Buy, Sell and Hold Signals

AL Target Price Prediction Modeling Methodology

Stock price forecasting is a popular and important topic in financial and academic studies. Share market is an volatile place for predicting since there are no significant rules to estimate or predict the price of a share in the share market. Many methods like technical analysis, fundamental analysis, time series analysis and statistical analysis etc. are used to predict the price in tie share market but none of these methods are proved as a consistently acceptable prediction tool. In this paper, we implemented a Random Forest approach to predict stock market prices. We consider Air Lease Corporation Stock Decision Process with Factor where A is the set of discrete actions of AL 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(Factor)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 (DNN Layer)) X S(n):→ (n+16 weeks) i = 1 n a i

n:Time series to forecast

p:Price signals of AL 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?

AL Stock Forecast (Buy or Sell) for (n+16 weeks)

Sample Set: Neural Network
Stock/Index: AL Air Lease Corporation
Time series to forecast n: 17 Nov 2022 for (n+16 weeks)

According to price forecasts for (n+16 weeks) period: The dominant strategy among neural network is to Hold AL 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 Air Lease Corporation

  1. The significance of a change in the credit risk since initial recognition depends on the risk of a default occurring as at initial recognition. Thus, a given change, in absolute terms, in the risk of a default occurring will be more significant for a financial instrument with a lower initial risk of a default occurring compared to a financial instrument with a higher initial risk of a default occurring.
  2. For hedges other than hedges of foreign currency risk, when an entity designates a non-derivative financial asset or a non-derivative financial liability measured at fair value through profit or loss as a hedging instrument, it may only designate the non-derivative financial instrument in its entirety or a proportion of it.
  3. For the avoidance of doubt, the effects of replacing the original counterparty with a clearing counterparty and making the associated changes as described in paragraph 6.5.6 shall be reflected in the measurement of the hedging instrument and therefore in the assessment of hedge effectiveness and the measurement of hedge effectiveness
  4. A similar example of a non-financial item is a specific type of crude oil from a particular oil field that is priced off the relevant benchmark crude oil. If an entity sells that crude oil under a contract using a contractual pricing formula that sets the price per barrel at the benchmark crude oil price minus CU10 with a floor of CU15, the entity can designate as the hedged item the entire cash flow variability under the sales contract that is attributable to the change in the benchmark crude oil price. However, the entity cannot designate a component that is equal to the full change in the benchmark crude oil price. Hence, as long as the forward price (for each delivery) does not fall below CU25, the hedged item has the same cash flow variability as a crude oil sale at the benchmark crude oil price (or with a positive spread). However, if the forward price for any delivery falls below CU25, the hedged item has a lower cash flow variability than a crude oil sale at the benchmark crude oil price (or with a positive spread).

*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

Air Lease Corporation assigned short-term Ba3 & long-term Ba2 forecasted stock rating. We evaluate the prediction models Modular Neural Network (DNN Layer) with Factor1,2,3,4 and conclude that the AL stock is predictable in the short/long term. According to price forecasts for (n+16 weeks) period: The dominant strategy among neural network is to Hold AL stock.

Financial State Forecast for AL Air Lease Corporation Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*Ba3Ba2
Operational Risk 7977
Market Risk8337
Technical Analysis3873
Fundamental Analysis5889
Risk Unsystematic5869

Prediction Confidence Score

Trust metric by Neural Network: 80 out of 100 with 516 signals.

References

  1. Hartford J, Lewis G, Taddy M. 2016. Counterfactual prediction with deep instrumental variables networks. arXiv:1612.09596 [stat.AP]
  2. Hill JL. 2011. Bayesian nonparametric modeling for causal inference. J. Comput. Graph. Stat. 20:217–40
  3. S. J. Russell and P. Norvig. Artificial Intelligence: A Modern Approach. Prentice Hall, Englewood Cliffs, NJ, 3nd edition, 2010
  4. Harris ZS. 1954. Distributional structure. Word 10:146–62
  5. Rumelhart DE, Hinton GE, Williams RJ. 1986. Learning representations by back-propagating errors. Nature 323:533–36
  6. M. L. Littman. Markov games as a framework for multi-agent reinforcement learning. In Ma- chine Learning, Proceedings of the Eleventh International Conference, Rutgers University, New Brunswick, NJ, USA, July 10-13, 1994, pages 157–163, 1994
  7. uyer, S. Whiteson, B. Bakker, and N. A. Vlassis. Multiagent reinforcement learning for urban traffic control using coordination graphs. In Machine Learning and Knowledge Discovery in Databases, European Conference, ECML/PKDD 2008, Antwerp, Belgium, September 15-19, 2008, Proceedings, Part I, pages 656–671, 2008.
Frequently Asked QuestionsQ: What is the prediction methodology for AL stock?
A: AL stock prediction methodology: We evaluate the prediction models Modular Neural Network (DNN Layer) and Factor
Q: Is AL stock a buy or sell?
A: The dominant strategy among neural network is to Hold AL Stock.
Q: Is Air Lease Corporation stock a good investment?
A: The consensus rating for Air Lease Corporation is Hold and assigned short-term Ba3 & long-term Ba2 forecasted stock rating.
Q: What is the consensus rating of AL stock?
A: The consensus rating for AL is Hold.
Q: What is the prediction period for AL stock?
A: The prediction period for AL is (n+16 weeks)

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