Modelling A.I. in Economics

LON:ECHO Stock Price Prediction

One decision in Stock Market can make huge impact on an investor's life. The stock market is a complex system and often covered in mystery, it is therefore, very difficult to analyze all the impacting factors before making a decision. In this research, we have tried to design a stock market prediction model which is based on different factors. We evaluate ECHO ENERGY PLC prediction models with Transfer Learning (ML) and Beta1,2,3,4 and conclude that the LON:ECHO 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 LON:ECHO stock.


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

Key Points

  1. Fundemental Analysis with Algorithmic Trading
  2. Understanding Buy, Sell, and Hold Ratings
  3. Trading Signals

LON:ECHO Target Price Prediction Modeling Methodology

Prediction of stocks is complicated by the dynamic, complex, and chaotic environment of the stock market. Many studies predict stock price movements using deep learning models. Although the attention mechanism has gained popularity recently in neural machine translation, little focus has been devoted to attention-based deep learning models for stock prediction. We consider ECHO ENERGY PLC Stock Decision Process with Beta where A is the set of discrete actions of LON:ECHO 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(Beta)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(Transfer Learning (ML)) X S(n):→ (n+8 weeks) r s rs

n:Time series to forecast

p:Price signals of LON:ECHO 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?

LON:ECHO Stock Forecast (Buy or Sell) for (n+8 weeks)


Sample Set: Neural Network
Stock/Index: LON:ECHO ECHO ENERGY PLC
Time series to forecast n: 07 Nov 2022 for (n+8 weeks)

According to price forecasts for (n+8 weeks) period: The dominant strategy among neural network is to Hold LON:ECHO 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 ECHO ENERGY PLC

  1. Although the objective of an entity's business model may be to hold financial assets in order to collect contractual cash flows, the entity need not hold all of those instruments until maturity. Thus an entity's business model can be to hold financial assets to collect contractual cash flows even when sales of financial assets occur or are expected to occur in the future.
  2. 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.
  3. An entity shall amend a hedging relationship as required in paragraph 6.9.1 by the end of the reporting period during which a change required by interest rate benchmark reform is made to the hedged risk, hedged item or hedging instrument. For the avoidance of doubt, such an amendment to the formal designation of a hedging relationship constitutes neither the discontinuation of the hedging relationship nor the designation of a new hedging relationship.
  4. An entity shall assess whether contractual cash flows are solely payments of principal and interest on the principal amount outstanding for the currency in which the financial asset is denominated.

*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

ECHO ENERGY PLC assigned short-term B1 & long-term B2 forecasted stock rating. We evaluate the prediction models Transfer Learning (ML) with Beta1,2,3,4 and conclude that the LON:ECHO 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 LON:ECHO stock.

Financial State Forecast for LON:ECHO ECHO ENERGY PLC Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B1B2
Operational Risk 4338
Market Risk8058
Technical Analysis5457
Fundamental Analysis6963
Risk Unsystematic5932

Prediction Confidence Score

Trust metric by Neural Network: 83 out of 100 with 719 signals.

References

  1. Z. Wang, T. Schaul, M. Hessel, H. van Hasselt, M. Lanctot, and N. de Freitas. Dueling network architectures for deep reinforcement learning. In Proceedings of the International Conference on Machine Learning (ICML), pages 1995–2003, 2016.
  2. Wan M, Wang D, Goldman M, Taddy M, Rao J, et al. 2017. Modeling consumer preferences and price sensitiv- ities from large-scale grocery shopping transaction logs. In Proceedings of the 26th International Conference on the World Wide Web, pp. 1103–12. New York: ACM
  3. Hoerl AE, Kennard RW. 1970. Ridge regression: biased estimation for nonorthogonal problems. Technometrics 12:55–67
  4. Belsley, D. A. (1988), "Modelling and forecast reliability," International Journal of Forecasting, 4, 427–447.
  5. Chow, G. C. (1960), "Tests of equality between sets of coefficients in two linear regressions," Econometrica, 28, 591–605.
  6. Y. Chow and M. Ghavamzadeh. Algorithms for CVaR optimization in MDPs. In Advances in Neural Infor- mation Processing Systems, pages 3509–3517, 2014.
  7. J. Harb and D. Precup. Investigating recurrence and eligibility traces in deep Q-networks. In Deep Reinforcement Learning Workshop, NIPS 2016, Barcelona, Spain, 2016.
Frequently Asked QuestionsQ: What is the prediction methodology for LON:ECHO stock?
A: LON:ECHO stock prediction methodology: We evaluate the prediction models Transfer Learning (ML) and Beta
Q: Is LON:ECHO stock a buy or sell?
A: The dominant strategy among neural network is to Hold LON:ECHO Stock.
Q: Is ECHO ENERGY PLC stock a good investment?
A: The consensus rating for ECHO ENERGY PLC is Hold and assigned short-term B1 & long-term B2 forecasted stock rating.
Q: What is the consensus rating of LON:ECHO stock?
A: The consensus rating for LON:ECHO is Hold.
Q: What is the prediction period for LON:ECHO stock?
A: The prediction period for LON:ECHO is (n+8 weeks)

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