Modelling A.I. in Economics

Machine Learning stock prediction: KNX Stock Prediction (Forecast)

Investors raise profit from stock market by maximising gains and minimising loses. The profit is difficult to raise because of the volatile nature of stock market prices. Predictive modelling allows investors to make informed decisions. We evaluate Knight-Swift prediction models with Statistical Inference (ML) and Wilcoxon Sign-Rank Test1,2,3,4 and conclude that the KNX stock is predictable in the short/long term. According to price forecasts for (n+16 weeks) period: The dominant strategy among neural network is to Hold KNX stock.


Keywords: KNX, Knight-Swift, stock forecast, machine learning based prediction, risk rating, buy-sell behaviour, stock analysis, target price analysis, options and futures.

Key Points

  1. Operational Risk
  2. Investment Risk
  3. Market Signals

KNX Target Price Prediction Modeling Methodology

Recently, a lot of interesting work has been done in the area of applying Machine Learning Algorithms for analyzing price patterns and predicting stock prices and index changes. Most stock traders nowadays depend on Intelligent Trading Systems which help them in predicting prices based on various situations and conditions, thereby helping them in making instantaneous investment decisions. We consider Knight-Swift Stock Decision Process with Wilcoxon Sign-Rank Test where A is the set of discrete actions of KNX 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(Wilcoxon Sign-Rank 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(Statistical Inference (ML)) X S(n):→ (n+16 weeks) i = 1 n s i

n:Time series to forecast

p:Price signals of KNX 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?

KNX Stock Forecast (Buy or Sell) for (n+16 weeks)

Sample Set: Neural Network
Stock/Index: KNX Knight-Swift
Time series to forecast n: 02 Nov 2022 for (n+16 weeks)

According to price forecasts for (n+16 weeks) period: The dominant strategy among neural network is to Hold KNX 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 Knight-Swift

  1. When measuring hedge ineffectiveness, an entity shall consider the time value of money. Consequently, the entity determines the value of the hedged item on a present value basis and therefore the change in the value of the hedged item also includes the effect of the time value of money.
  2. Conversely, if changes in the extent of offset indicate that the fluctuation is around a hedge ratio that is different from the hedge ratio that is currently used for that hedging relationship, or that there is a trend leading away from that hedge ratio, hedge ineffectiveness can be reduced by adjusting the hedge ratio, whereas retaining the hedge ratio would increasingly produce hedge ineffectiveness. Hence, in such circumstances, an entity must evaluate whether the hedging relationship reflects an imbalance between the weightings of the hedged item and the hedging instrument that would create hedge ineffectiveness (irrespective of whether recognised or not) that could result in an accounting outcome that would be inconsistent with the purpose of hedge accounting. If the hedge ratio is adjusted, it also affects the measurement and recognition of hedge ineffectiveness because, on rebalancing, the hedge ineffectiveness of the hedging relationship must be determined and recognised immediately before adjusting the hedging relationship in accordance with paragraph B6.5.8.
  3. To calculate the change in the value of the hedged item for the purpose of measuring hedge ineffectiveness, an entity may use a derivative that would have terms that match the critical terms of the hedged item (this is commonly referred to as a 'hypothetical derivative'), and, for example for a hedge of a forecast transaction, would be calibrated using the hedged price (or rate) level. For example, if the hedge was for a two-sided risk at the current market level, the hypothetical derivative would represent a hypothetical forward contract that is calibrated to a value of nil at the time of designation of the hedging relationship. If the hedge was for example for a one-sided risk, the hypothetical derivative would represent the intrinsic value of a hypothetical option that at the time of designation of the hedging relationship is at the money if the hedged price level is the current market level, or out of the money if the hedged price level is above (or, for a hedge of a long position, below) the current market level. Using a hypothetical derivative is one possible way of calculating the change in the value of the hedged item. The hypothetical derivative replicates the hedged item and hence results in the same outcome as if that change in value was determined by a different approach. Hence, using a 'hypothetical derivative' is not a method in its own right but a mathematical expedient that can only be used to calculate the value of the hedged item. Consequently, a 'hypothetical derivative' cannot be used to include features in the value of the hedged item that only exist in the hedging instrument (but not in the hedged item). An example is debt denominated in a foreign currency (irrespective of whether it is fixed-rate or variable-rate debt). When using a hypothetical derivative to calculate the change in the value of such debt or the present value of the cumulative change in its cash flows, the hypothetical derivative cannot simply impute a charge for exchanging different currencies even though actual derivatives under which different currencies are exchanged might include such a charge (for example, cross-currency interest rate swaps).
  4. 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).

*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

Knight-Swift assigned short-term B2 & long-term B1 forecasted stock rating. We evaluate the prediction models Statistical Inference (ML) with Wilcoxon Sign-Rank Test1,2,3,4 and conclude that the KNX stock is predictable in the short/long term. According to price forecasts for (n+16 weeks) period: The dominant strategy among neural network is to Hold KNX stock.

Financial State Forecast for KNX Knight-Swift Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B2B1
Operational Risk 4965
Market Risk7571
Technical Analysis3733
Fundamental Analysis3248
Risk Unsystematic7671

Prediction Confidence Score

Trust metric by Neural Network: 74 out of 100 with 483 signals.

References

  1. Semenova V, Goldman M, Chernozhukov V, Taddy M. 2018. Orthogonal ML for demand estimation: high dimensional causal inference in dynamic panels. arXiv:1712.09988 [stat.ML]
  2. C. Szepesvári. Algorithms for Reinforcement Learning. Synthesis Lectures on Artificial Intelligence and Machine Learning. Morgan & Claypool Publishers, 2010
  3. A. Y. Ng, D. Harada, and S. J. Russell. Policy invariance under reward transformations: Theory and application to reward shaping. In Proceedings of the Sixteenth International Conference on Machine Learning (ICML 1999), Bled, Slovenia, June 27 - 30, 1999, pages 278–287, 1999.
  4. Miller A. 2002. Subset Selection in Regression. New York: CRC Press
  5. D. Bertsekas and J. Tsitsiklis. Neuro-dynamic programming. Athena Scientific, 1996.
  6. Scott SL. 2010. A modern Bayesian look at the multi-armed bandit. Appl. Stoch. Models Bus. Ind. 26:639–58
  7. S. J. Russell and A. Zimdars. Q-decomposition for reinforcement learning agents. In Machine Learning, Proceedings of the Twentieth International Conference (ICML 2003), August 21-24, 2003, Washington, DC, USA, pages 656–663, 2003.
Frequently Asked QuestionsQ: What is the prediction methodology for KNX stock?
A: KNX stock prediction methodology: We evaluate the prediction models Statistical Inference (ML) and Wilcoxon Sign-Rank Test
Q: Is KNX stock a buy or sell?
A: The dominant strategy among neural network is to Hold KNX Stock.
Q: Is Knight-Swift stock a good investment?
A: The consensus rating for Knight-Swift is Hold and assigned short-term B2 & long-term B1 forecasted stock rating.
Q: What is the consensus rating of KNX stock?
A: The consensus rating for KNX is Hold.
Q: What is the prediction period for KNX stock?
A: The prediction period for KNX is (n+16 weeks)

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