Modelling A.I. in Economics

Is FTV a Buy? (Forecast)

The categorization of high dimensional data present a fascinating challenge to machine learning models as frequent number of highly correlated dimensions or attributes can affect the accuracy of classification model. In this paper, the problem of high dimensionality of stock exchange is investigated to predict the market trends by applying the principal component analysis (PCA) with linear regression. PCA can help to improve the predictive performance of machine learning methods while reducing the redundancy among the data. We evaluate Fortive prediction models with Modular Neural Network (Market News Sentiment Analysis) and Spearman Correlation1,2,3,4 and conclude that the FTV stock is predictable in the short/long term. According to price forecasts for (n+6 month) period: The dominant strategy among neural network is to Hold FTV stock.


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

Key Points

  1. Investment Risk
  2. Market Outlook
  3. Market Outlook

FTV Target Price Prediction Modeling Methodology

In this paper, we introduce a new prediction model depend on Bidirectional Gated Recurrent Unit (BGRU). Our predictive model relies on both online financial news and historical stock prices data to predict the stock movements in the future. We consider Fortive Stock Decision Process with Spearman Correlation where A is the set of discrete actions of FTV 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(Spearman Correlation)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 News Sentiment Analysis)) X S(n):→ (n+6 month) r s rs

n:Time series to forecast

p:Price signals of FTV 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?

FTV Stock Forecast (Buy or Sell) for (n+6 month)


Sample Set: Neural Network
Stock/Index: FTV Fortive
Time series to forecast n: 08 Nov 2022 for (n+6 month)

According to price forecasts for (n+6 month) period: The dominant strategy among neural network is to Hold FTV 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 Fortive

  1. For lifetime expected credit losses, an entity shall estimate the risk of a default occurring on the financial instrument during its expected life. 12-month expected credit losses are a portion of the lifetime expected credit losses and represent the lifetime cash shortfalls that will result if a default occurs in the 12 months after the reporting date (or a shorter period if the expected life of a financial instrument is less than 12 months), weighted by the probability of that default occurring. Thus, 12-month expected credit losses are neither the lifetime expected credit losses that an entity will incur on financial instruments that it predicts will default in the next 12 months nor the cash shortfalls that are predicted over the next 12 months.
  2. If a financial instrument that was previously recognised as a financial asset is measured at fair value through profit or loss and its fair value decreases below zero, it is a financial liability measured in accordance with paragraph 4.2.1. However, hybrid contracts with hosts that are assets within the scope of this Standard are always measured in accordance with paragraph 4.3.2.
  3. The underlying pool must contain one or more instruments that have contractual cash flows that are solely payments of principal and interest on the principal amount outstanding
  4. A hedge of a firm commitment (for example, a hedge of the change in fuel price relating to an unrecognised contractual commitment by an electric utility to purchase fuel at a fixed price) is a hedge of an exposure to a change in fair value. Accordingly, such a hedge is a fair value hedge. However, in accordance with paragraph 6.5.4, a hedge of the foreign currency risk of a firm commitment could alternatively be accounted for as a cash flow hedge.

*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

Fortive assigned short-term Ba2 & long-term Ba3 forecasted stock rating. We evaluate the prediction models Modular Neural Network (Market News Sentiment Analysis) with Spearman Correlation1,2,3,4 and conclude that the FTV stock is predictable in the short/long term. According to price forecasts for (n+6 month) period: The dominant strategy among neural network is to Hold FTV stock.

Financial State Forecast for FTV Fortive Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*Ba2Ba3
Operational Risk 5272
Market Risk4489
Technical Analysis9040
Fundamental Analysis7766
Risk Unsystematic7548

Prediction Confidence Score

Trust metric by Neural Network: 77 out of 100 with 528 signals.

References

  1. Arjovsky M, Bottou L. 2017. Towards principled methods for training generative adversarial networks. arXiv:1701.04862 [stat.ML]
  2. Allen, P. G. (1994), "Economic forecasting in agriculture," International Journal of Forecasting, 10, 81–135.
  3. L. Prashanth and M. Ghavamzadeh. Actor-critic algorithms for risk-sensitive MDPs. In Proceedings of Advances in Neural Information Processing Systems 26, pages 252–260, 2013.
  4. Bell RM, Koren Y. 2007. Lessons from the Netflix prize challenge. ACM SIGKDD Explor. Newsl. 9:75–79
  5. Knox SW. 2018. Machine Learning: A Concise Introduction. Hoboken, NJ: Wiley
  6. Bessler, D. A. R. A. Babula, (1987), "Forecasting wheat exports: Do exchange rates matter?" Journal of Business and Economic Statistics, 5, 397–406.
  7. S. J. Russell and A. Zimdars. Q-decomposition for reinforcement learning agents. In Machine Learning, Proceedings of the Twentieth International Conference (ICML 2003), August 21-24, 2003, Washington, DC, USA, pages 656–663, 2003.
Frequently Asked QuestionsQ: What is the prediction methodology for FTV stock?
A: FTV stock prediction methodology: We evaluate the prediction models Modular Neural Network (Market News Sentiment Analysis) and Spearman Correlation
Q: Is FTV stock a buy or sell?
A: The dominant strategy among neural network is to Hold FTV Stock.
Q: Is Fortive stock a good investment?
A: The consensus rating for Fortive is Hold and assigned short-term Ba2 & long-term Ba3 forecasted stock rating.
Q: What is the consensus rating of FTV stock?
A: The consensus rating for FTV is Hold.
Q: What is the prediction period for FTV stock?
A: The prediction period for FTV is (n+6 month)

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