Modelling A.I. in Economics

Is now good time to invest? (VAC Stock Forecast) (Forecast)

In this paper we investigate ways to use prior knowledge and neural networks to improve multivariate prediction ability. Daily stock prices are predicted as a complicated real-world problem, taking non-numerical factors such as political and international events are into account. We have studied types of prior knowledge which are difficult to insert into initial network structures or to represent in the form of error measurements. We evaluate Marriott Vacations Worldwide prediction models with Modular Neural Network (Market Direction Analysis) and Ridge Regression1,2,3,4 and conclude that the VAC 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 Buy VAC stock.


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

Key Points

  1. What is prediction in deep learning?
  2. Can stock prices be predicted?
  3. Can stock prices be predicted?

VAC Target Price Prediction Modeling Methodology

Stock prediction with data mining techniques is one of the most important issues in finance being investigated by researchers across the globe. Data mining techniques can be used extensively in the financial markets to help investors make qualitative decision. One of the techniques is artificial neural network (ANN). However, in the application of ANN for predicting the financial market the use of technical analysis variables for stock prediction is predominant. In this paper, we present a hybridized approach which combines the use of the variables of technical and fundamental analysis of stock market indicators for prediction of future price of stock in order to improve on the existing approaches. We consider Marriott Vacations Worldwide Stock Decision Process with Ridge Regression where A is the set of discrete actions of VAC 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(Ridge 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+8 weeks) i = 1 n s i

n:Time series to forecast

p:Price signals of VAC 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?

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

Sample Set: Neural Network
Stock/Index: VAC Marriott Vacations Worldwide
Time series to forecast n: 17 Nov 2022 for (n+8 weeks)

According to price forecasts for (n+8 weeks) period: The dominant strategy among neural network is to Buy VAC 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 Marriott Vacations Worldwide

  1. There is a rebuttable presumption that unless inflation risk is contractually specified, it is not separately identifiable and reliably measurable and hence cannot be designated as a risk component of a financial instrument. However, in limited cases, it is possible to identify a risk component for inflation risk that is separately identifiable and reliably measurable because of the particular circumstances of the inflation environment and the relevant debt market
  2. If a variable-rate financial liability bears interest of (for example) three-month LIBOR minus 20 basis points (with a floor at zero basis points), an entity can designate as the hedged item the change in the cash flows of that entire liability (ie three-month LIBOR minus 20 basis points—including the floor) that is attributable to changes in LIBOR. Hence, as long as the three-month LIBOR forward curve for the remaining life of that liability does not fall below 20 basis points, the hedged item has the same cash flow variability as a liability that bears interest at three-month LIBOR with a zero or positive spread. However, if the three-month LIBOR forward curve for the remaining life of that liability (or a part of it) falls below 20 basis points, the hedged item has a lower cash flow variability than a liability that bears interest at threemonth LIBOR with a zero or positive spread.
  3. The business model may be to hold assets to collect contractual cash flows even if the entity sells financial assets when there is an increase in the assets' credit risk. To determine whether there has been an increase in the assets' credit risk, the entity considers reasonable and supportable information, including forward looking information. Irrespective of their frequency and value, sales due to an increase in the assets' credit risk are not inconsistent with a business model whose objective is to hold financial assets to collect contractual cash flows because the credit quality of financial assets is relevant to the entity's ability to collect contractual cash flows. Credit risk management activities that are aimed at minimising potential credit losses due to credit deterioration are integral to such a business model. Selling a financial asset because it no longer meets the credit criteria specified in the entity's documented investment policy is an example of a sale that has occurred due to an increase in credit risk. However, in the absence of such a policy, the entity may demonstrate in other ways that the sale occurred due to an increase in credit risk.
  4. If, at the date of initial application, determining whether there has been a significant increase in credit risk since initial recognition would require undue cost or effort, an entity shall recognise a loss allowance at an amount equal to lifetime expected credit losses at each reporting date until that financial instrument is derecognised (unless that financial instrument is low credit risk at a reporting date, in which case paragraph 7.2.19(a) applies).

*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

Marriott Vacations Worldwide assigned short-term B1 & long-term B1 forecasted stock rating. We evaluate the prediction models Modular Neural Network (Market Direction Analysis) with Ridge Regression1,2,3,4 and conclude that the VAC 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 Buy VAC stock.

Financial State Forecast for VAC Marriott Vacations Worldwide Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B1B1
Operational Risk 6284
Market Risk8281
Technical Analysis3941
Fundamental Analysis7346
Risk Unsystematic4331

Prediction Confidence Score

Trust metric by Neural Network: 74 out of 100 with 781 signals.

References

  1. 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.
  2. Breiman L. 1996. Bagging predictors. Mach. Learn. 24:123–40
  3. Dudik M, Erhan D, Langford J, Li L. 2014. Doubly robust policy evaluation and optimization. Stat. Sci. 29:485–511
  4. Athey S, Imbens G. 2016. Recursive partitioning for heterogeneous causal effects. PNAS 113:7353–60
  5. 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
  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. Wu X, Kumar V, Quinlan JR, Ghosh J, Yang Q, et al. 2008. Top 10 algorithms in data mining. Knowl. Inform. Syst. 14:1–37
Frequently Asked QuestionsQ: What is the prediction methodology for VAC stock?
A: VAC stock prediction methodology: We evaluate the prediction models Modular Neural Network (Market Direction Analysis) and Ridge Regression
Q: Is VAC stock a buy or sell?
A: The dominant strategy among neural network is to Buy VAC Stock.
Q: Is Marriott Vacations Worldwide stock a good investment?
A: The consensus rating for Marriott Vacations Worldwide is Buy and assigned short-term B1 & long-term B1 forecasted stock rating.
Q: What is the consensus rating of VAC stock?
A: The consensus rating for VAC is Buy.
Q: What is the prediction period for VAC stock?
A: The prediction period for VAC is (n+8 weeks)

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