Modelling A.I. in Economics

LON:LIKE Options & Futures Prediction (Forecast)

Stocks are possibly the most popular financial instrument invented for building wealth and are the centerpiece of any investment portfolio. The advances in trading technology has opened up the markets so that nowadays nearly anybody can own stocks. From last few decades, there seen explosive increase in the average person's interest for stock market. In a financially explosive market, as the stock market, it is important to have a very accurate prediction of a future trend. Because of the financial crisis and recording profits, it is compulsory to have a secure prediction of the values of the stocks. Predicting a non-linear signal requires progressive algorithms of machine learning with help of Artificial Intelligence (AI). We evaluate LIKEWISE GROUP PLC prediction models with Modular Neural Network (DNN Layer) and Independent T-Test1,2,3,4 and conclude that the LON:LIKE stock is predictable in the short/long term. According to price forecasts for (n+4 weeks) period: The dominant strategy among neural network is to Hold LON:LIKE stock.


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

Key Points

  1. What are buy sell or hold recommendations?
  2. Should I buy stocks now or wait amid such uncertainty?
  3. Which neural network is best for prediction?

LON:LIKE Target Price Prediction Modeling Methodology

Predicting stock index with traditional time series analysis has proven to be difficult an Artificial Neural network may be suitable for the task. A Neural Network has the ability to extract useful information from large set of data. This paper presents a review of literature application of Artificial Neural Network for stock market predictions and from this literature found that Artificial Neural Network is very useful for predicting world stock markets. We consider LIKEWISE GROUP PLC Stock Decision Process with Independent T-Test where A is the set of discrete actions of LON:LIKE 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(Independent T-Test)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 (DNN Layer)) X S(n):→ (n+4 weeks) e x rx

n:Time series to forecast

p:Price signals of LON:LIKE 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:LIKE Stock Forecast (Buy or Sell) for (n+4 weeks)


Sample Set: Neural Network
Stock/Index: LON:LIKE LIKEWISE GROUP PLC
Time series to forecast n: 02 Nov 2022 for (n+4 weeks)

According to price forecasts for (n+4 weeks) period: The dominant strategy among neural network is to Hold LON:LIKE 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 LIKEWISE GROUP PLC

  1. The change in the value of the hedged item determined using a hypothetical derivative may also be used for the purpose of assessing whether a hedging relationship meets the hedge effectiveness requirements.
  2. Historical information is an important anchor or base from which to measure expected credit losses. However, an entity shall adjust historical data, such as credit loss experience, on the basis of current observable data to reflect the effects of the current conditions and its forecasts of future conditions that did not affect the period on which the historical data is based, and to remove the effects of the conditions in the historical period that are not relevant to the future contractual cash flows. In some cases, the best reasonable and supportable information could be the unadjusted historical information, depending on the nature of the historical information and when it was calculated, compared to circumstances at the reporting date and the characteristics of the financial instrument being considered. Estimates of changes in expected credit losses should reflect, and be directionally consistent with, changes in related observable data from period to period
  3. An entity shall apply the impairment requirements in Section 5.5 retrospectively in accordance with IAS 8 subject to paragraphs 7.2.15 and 7.2.18–7.2.20.
  4. If changes are made in addition to those changes required by interest rate benchmark reform to the financial asset or financial liability designated in a hedging relationship (as described in paragraphs 5.4.6–5.4.8) or to the designation of the hedging relationship (as required by paragraph 6.9.1), an entity shall first apply the applicable requirements in this Standard to determine if those additional changes result in the discontinuation of hedge accounting. If the additional changes do not result in the discontinuation of hedge accounting, an entity shall amend the formal designation of the hedging relationship as specified in paragraph 6.9.1.

*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

LIKEWISE GROUP PLC assigned short-term B2 & long-term B2 forecasted stock rating. We evaluate the prediction models Modular Neural Network (DNN Layer) with Independent T-Test1,2,3,4 and conclude that the LON:LIKE stock is predictable in the short/long term. According to price forecasts for (n+4 weeks) period: The dominant strategy among neural network is to Hold LON:LIKE stock.

Financial State Forecast for LON:LIKE LIKEWISE GROUP PLC Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B2B2
Operational Risk 3346
Market Risk4147
Technical Analysis7432
Fundamental Analysis5483
Risk Unsystematic8642

Prediction Confidence Score

Trust metric by Neural Network: 84 out of 100 with 881 signals.

References

  1. M. Sobel. The variance of discounted Markov decision processes. Applied Probability, pages 794–802, 1982
  2. J. Filar, L. Kallenberg, and H. Lee. Variance-penalized Markov decision processes. Mathematics of Opera- tions Research, 14(1):147–161, 1989
  3. Clements, M. P. D. F. Hendry (1996), "Intercept corrections and structural change," Journal of Applied Econometrics, 11, 475–494.
  4. N. B ̈auerle and J. Ott. Markov decision processes with average-value-at-risk criteria. Mathematical Methods of Operations Research, 74(3):361–379, 2011
  5. Belsley, D. A. (1988), "Modelling and forecast reliability," International Journal of Forecasting, 4, 427–447.
  6. 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.
  7. M. J. Hausknecht. Cooperation and Communication in Multiagent Deep Reinforcement Learning. PhD thesis, The University of Texas at Austin, 2016
Frequently Asked QuestionsQ: What is the prediction methodology for LON:LIKE stock?
A: LON:LIKE stock prediction methodology: We evaluate the prediction models Modular Neural Network (DNN Layer) and Independent T-Test
Q: Is LON:LIKE stock a buy or sell?
A: The dominant strategy among neural network is to Hold LON:LIKE Stock.
Q: Is LIKEWISE GROUP PLC stock a good investment?
A: The consensus rating for LIKEWISE GROUP PLC is Hold and assigned short-term B2 & long-term B2 forecasted stock rating.
Q: What is the consensus rating of LON:LIKE stock?
A: The consensus rating for LON:LIKE is Hold.
Q: What is the prediction period for LON:LIKE stock?
A: The prediction period for LON:LIKE is (n+4 weeks)

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