LON:INV INVESTMENT COMPANY PLC (Forecast)

INVESTMENT COMPANY PLC Research Report

Summary

Recently, there has been a surge of interest in the use of machine learning to help aid in the accurate predictions of financial markets. Despite the exciting advances in this cross-section of finance and AI, many of the current approaches are limited to using technical analysis to capture historical trends of each stock price and thus limited to certain experimental setups to obtain good prediction results. On the other hand, professional investors additionally use their rich knowledge of inter-market and inter-company relations to map the connectivity of companies and events, and use this map to make better market predictions. For instance, they would predict the movement of a certain company's stock price based not only on its former stock price trends but also on the performance of its suppliers or customers, the overall industry, macroeconomic factors and trade policies. This paper investigates the effectiveness of work at the intersection of market predictions and graph neural networks, which hold the potential to mimic the ways in which investors make decisions by incorporating company knowledge graphs directly into the predictive model. We evaluate INVESTMENT COMPANY PLC prediction models with Modular Neural Network (Market Direction Analysis) and Stepwise Regression^1,2,3,4 and conclude that the LON:INV 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 LON:INV stock.

Key Points

1. How do predictive algorithms actually work?
2. Probability Distribution
3. Prediction Modeling

LON:INV Target Price Prediction Modeling Methodology

We consider INVESTMENT COMPANY PLC Stock Decision Process with Modular Neural Network (Market Direction Analysis) where A is the set of discrete actions of LON:INV 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(Stepwise Regression)^5,6,7= $\begin{array}{cccc}{p}_{\mathrm{a}1}& p_{\mathrm{a}2}& \dots & p_{1n}\\ & ⋮\\ p_{j1}& p_{j2}& \dots & p_{jn}\\ & ⋮\\ p_{k1}& p_{k2}& \dots & p_{kn}\\ & ⋮\\ p_{n1}& p_{n2}& \dots & p_{nn}\end{array}$ X R(Modular Neural Network (Market Direction Analysis)) X S(n):→ (n+6 month) $\begin{array}{l}\int e^x\mathrm{rx}\end{array}$

n:Time series to forecast

p:Price signals of LON:INV 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?

LON:INV Stock Forecast (Buy or Sell) for (n+6 month)

Sample Set: Neural Network
Stock/Index: LON:INV INVESTMENT COMPANY PLC
Time series to forecast n: 28 Nov 2022 for (n+6 month)

According to price forecasts for (n+6 month) period: The dominant strategy among neural network is to Hold LON:INV 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 INVESTMENT COMPANY PLC

1. 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.
2. The accounting for the time value of options in accordance with paragraph 6.5.15 applies only to the extent that the time value relates to the hedged item (aligned time value). The time value of an option relates to the hedged item if the critical terms of the option (such as the nominal amount, life and underlying) are aligned with the hedged item. Hence, if the critical terms of the option and the hedged item are not fully aligned, an entity shall determine the aligned time value, ie how much of the time value included in the premium (actual time value) relates to the hedged item (and therefore should be treated in accordance with paragraph 6.5.15). An entity determines the aligned time value using the valuation of the option that would have critical terms that perfectly match the hedged item.
3. An entity shall apply the amendments to IFRS 9 made by IFRS 17 as amended in June 2020 retrospectively in accordance with IAS 8, except as specified in paragraphs 7.2.37–7.2.42.
4. Credit risk analysis is a multifactor and holistic analysis; whether a specific factor is relevant, and its weight compared to other factors, will depend on the type of product, characteristics of the financial instruments and the borrower as well as the geographical region. An entity shall consider reasonable and supportable information that is available without undue cost or effort and that is relevant for the particular financial instrument being assessed. However, some factors or indicators may not be identifiable on an individual financial instrument level. In such a case, the factors or indicators should be assessed for appropriate portfolios, groups of portfolios or portions of a portfolio of financial instruments to determine whether the requirement in paragraph 5.5.3 for the recognition of lifetime expected credit losses has been met.

*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

INVESTMENT COMPANY PLC assigned short-term B3 & long-term Ba3 forecasted stock rating. We evaluate the prediction models Modular Neural Network (Market Direction Analysis) with Stepwise Regression^1,2,3,4 and conclude that the LON:INV 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 LON:INV stock.

Financial State Forecast for LON:INV INVESTMENT COMPANY PLC Stock Options & Futures

Rating	Short-Term	Long-Term Senior
Outlook*	B3	Ba3
Operational Risk	66	67
Market Risk	39	35
Technical Analysis	66	78
Fundamental Analysis	45	74
Risk Unsystematic	32	57

Prediction Confidence Score

Trust metric by Neural Network: 93 out of 100 with 815 signals.

References

1. J. Harb and D. Precup. Investigating recurrence and eligibility traces in deep Q-networks. In Deep Reinforcement Learning Workshop, NIPS 2016, Barcelona, Spain, 2016.
2. Bamler R, Mandt S. 2017. Dynamic word embeddings via skip-gram filtering. In Proceedings of the 34th Inter- national Conference on Machine Learning, pp. 380–89. La Jolla, CA: Int. Mach. Learn. Soc.
3. J. Hu and M. P. Wellman. Nash q-learning for general-sum stochastic games. Journal of Machine Learning Research, 4:1039–1069, 2003.
4. Hill JL. 2011. Bayesian nonparametric modeling for causal inference. J. Comput. Graph. Stat. 20:217–40
5. Gentzkow M, Kelly BT, Taddy M. 2017. Text as data. NBER Work. Pap. 23276
6. Candès EJ, Recht B. 2009. Exact matrix completion via convex optimization. Found. Comput. Math. 9:717
7. Friedman JH. 2002. Stochastic gradient boosting. Comput. Stat. Data Anal. 38:367–78

Frequently Asked Questions

Q: What is the prediction methodology for LON:INV stock?
A: LON:INV stock prediction methodology: We evaluate the prediction models Modular Neural Network (Market Direction Analysis) and Stepwise Regression
Q: Is LON:INV stock a buy or sell?
A: The dominant strategy among neural network is to Hold LON:INV Stock.
Q: Is INVESTMENT COMPANY PLC stock a good investment?
A: The consensus rating for INVESTMENT COMPANY PLC is Hold and assigned short-term B3 & long-term Ba3 forecasted stock rating.
Q: What is the consensus rating of LON:INV stock?
A: The consensus rating for LON:INV is Hold.
Q: What is the prediction period for LON:INV stock?
A: The prediction period for LON:INV is (n+6 month)

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