Is WMG a Buy?

Warner Music Group Corp. Class A Common Stock Research Report

Summary

The stock market is an interesting industry to study. There are various variations present in it. Many experts have been studying and researching on the various trends that the stock market goes through. One of the major studies has been the attempt to predict the stock prices of various companies based on historical data. Prediction of stock prices will greatly help people to understand where and how to invest so that the risk of losing money is minimized. We evaluate Warner Music Group Corp. Class A Common Stock prediction models with Modular Neural Network (Market Volatility Analysis) and Ridge Regression1,2,3,4 and conclude that the WMG 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 WMG stock.

Key Points

  1. Short/Long Term Stocks
  2. How do you pick a stock?
  3. Fundemental Analysis with Algorithmic Trading

WMG Target Price Prediction Modeling Methodology

We consider Warner Music Group Corp. Class A Common Stock Stock Decision Process with Modular Neural Network (Market Volatility Analysis) where A is the set of discrete actions of WMG 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 Volatility Analysis)) X S(n):→ (n+6 month) i = 1 n s i

n:Time series to forecast

p:Price signals of WMG stock

j:Nash equilibria (Neural Network)

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?

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

Sample Set: Neural Network
Stock/Index: WMG Warner Music Group Corp. Class A Common Stock
Time series to forecast n: 21 Nov 2022 for (n+6 month)

According to price forecasts for (n+6 month) period: The dominant strategy among neural network is to Hold WMG 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 Warner Music Group Corp. Class A Common Stock

  1. An entity may use practical expedients when measuring expected credit losses if they are consistent with the principles in paragraph 5.5.17. An example of a practical expedient is the calculation of the expected credit losses on trade receivables using a provision matrix. The entity would use its historical credit loss experience (adjusted as appropriate in accordance with paragraphs B5.5.51–B5.5.52) for trade receivables to estimate the 12-month expected credit losses or the lifetime expected credit losses on the financial assets as relevant. A provision matrix might, for example, specify fixed provision rates depending on the number of days that a trade receivable is past due (for example, 1 per cent if not past due, 2 per cent if less than 30 days past due, 3 per cent if more than 30 days but less than 90 days past due, 20 per cent if 90–180 days past due etc). Depending on the diversity of its customer base, the entity would use appropriate groupings if its historical credit loss experience shows significantly different loss patterns for different customer segments. Examples of criteria that might be used to group assets include geographical region, product type, customer rating, collateral or trade credit insurance and type of customer (such as wholesale or retail)
  2. At the date of initial application, an entity shall use reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that a financial instrument was initially recognised (or for loan commitments and financial guarantee contracts at the date that the entity became a party to the irrevocable commitment in accordance with paragraph 5.5.6) and compare that to the credit risk at the date of initial application of this Standard.
  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. Hedge effectiveness is the extent to which changes in the fair value or the cash flows of the hedging instrument offset changes in the fair value or the cash flows of the hedged item (for example, when the hedged item is a risk component, the relevant change in fair value or cash flows of an item is the one that is attributable to the hedged risk). Hedge ineffectiveness is the extent to which the changes in the fair value or the cash flows of the hedging instrument are greater or less than those on the hedged item.

*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

Warner Music Group Corp. Class A Common Stock assigned short-term B1 & long-term B2 forecasted stock rating. We evaluate the prediction models Modular Neural Network (Market Volatility Analysis) with Ridge Regression1,2,3,4 and conclude that the WMG 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 WMG stock.

Financial State Forecast for WMG Warner Music Group Corp. Class A Common Stock Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B1B2
Operational Risk 7560
Market Risk4990
Technical Analysis3157
Fundamental Analysis5630
Risk Unsystematic7936

Prediction Confidence Score

Trust metric by Neural Network: 93 out of 100 with 721 signals.

References

  1. A. Tamar, Y. Glassner, and S. Mannor. Policy gradients beyond expectations: Conditional value-at-risk. In AAAI, 2015
  2. Blei DM, Lafferty JD. 2009. Topic models. In Text Mining: Classification, Clustering, and Applications, ed. A Srivastava, M Sahami, pp. 101–24. Boca Raton, FL: CRC Press
  3. Breusch, T. S. (1978), "Testing for autocorrelation in dynamic linear models," Australian Economic Papers, 17, 334–355.
  4. Hastie T, Tibshirani R, Tibshirani RJ. 2017. Extended comparisons of best subset selection, forward stepwise selection, and the lasso. arXiv:1707.08692 [stat.ME]
  5. A. Eck, L. Soh, S. Devlin, and D. Kudenko. Potential-based reward shaping for finite horizon online POMDP planning. Autonomous Agents and Multi-Agent Systems, 30(3):403–445, 2016
  6. Morris CN. 1983. Parametric empirical Bayes inference: theory and applications. J. Am. Stat. Assoc. 78:47–55
  7. E. Altman, K. Avrachenkov, and R. N ́u ̃nez-Queija. Perturbation analysis for denumerable Markov chains with application to queueing models. Advances in Applied Probability, pages 839–853, 2004
Frequently Asked QuestionsQ: What is the prediction methodology for WMG stock?
A: WMG stock prediction methodology: We evaluate the prediction models Modular Neural Network (Market Volatility Analysis) and Ridge Regression
Q: Is WMG stock a buy or sell?
A: The dominant strategy among neural network is to Hold WMG Stock.
Q: Is Warner Music Group Corp. Class A Common Stock stock a good investment?
A: The consensus rating for Warner Music Group Corp. Class A Common Stock is Hold and assigned short-term B1 & long-term B2 forecasted stock rating.
Q: What is the consensus rating of WMG stock?
A: The consensus rating for WMG is Hold.
Q: What is the prediction period for WMG stock?
A: The prediction period for WMG is (n+6 month)

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