Modelling A.I. in Economics

Machine Learning stock prediction: NLOK Stock Prediction (Forecast)

Predicting the future price of financial assets has always been an important research topic in the field of quantitative finance. This paper attempts to use the latest artificial intelligence technologies to design and implement a framework for financial asset price prediction. We evaluate NortonLifeLock prediction models with Modular Neural Network (Market Volatility Analysis) and Pearson Correlation1,2,3,4 and conclude that the NLOK 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 Sell NLOK stock.


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

Key Points

  1. Can neural networks predict stock market?
  2. Can we predict stock market using machine learning?
  3. Market Signals

NLOK 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 NortonLifeLock Stock Decision Process with Pearson Correlation where A is the set of discrete actions of NLOK 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(Pearson Correlation)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+4 weeks) r s rs

n:Time series to forecast

p:Price signals of NLOK 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?

NLOK Stock Forecast (Buy or Sell) for (n+4 weeks)


Sample Set: Neural Network
Stock/Index: NLOK NortonLifeLock
Time series to forecast n: 07 Nov 2022 for (n+4 weeks)

According to price forecasts for (n+4 weeks) period: The dominant strategy among neural network is to Sell NLOK 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 NortonLifeLock

  1. There is a rebuttable presumption that unless inflation risk is contractually specified, it is not separately identifiable and reliably measurable and hence cannot be designated as a risk component of a financial instrument. However, in limited cases, it is possible to identify a risk component for inflation risk that is separately identifiable and reliably measurable because of the particular circumstances of the inflation environment and the relevant debt market
  2. 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.
  3. Paragraph 6.3.4 permits an entity to designate as hedged items aggregated exposures that are a combination of an exposure and a derivative. When designating such a hedged item, an entity assesses whether the aggregated exposure combines an exposure with a derivative so that it creates a different aggregated exposure that is managed as one exposure for a particular risk (or risks). In that case, the entity may designate the hedged item on the basis of the aggregated exposure
  4. For example, an entity hedges an exposure to Foreign Currency A using a currency derivative that references Foreign Currency B and Foreign Currencies A and B are pegged (ie their exchange rate is maintained within a band or at an exchange rate set by a central bank or other authority). If the exchange rate between Foreign Currency A and Foreign Currency B were changed (ie a new band or rate was set), rebalancing the hedging relationship to reflect the new exchange rate would ensure that the hedging relationship would continue to meet the hedge effectiveness requirement for the hedge ratio in the new circumstances. In contrast, if there was a default on the currency derivative, changing the hedge ratio could not ensure that the hedging relationship would continue to meet that hedge effectiveness requirement. Hence, rebalancing does not facilitate the continuation of a hedging relationship in situations in which the relationship between the hedging instrument and the hedged item changes in a way that cannot be compensated for by adjusting the hedge ratio

*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

NortonLifeLock assigned short-term B1 & long-term B1 forecasted stock rating. We evaluate the prediction models Modular Neural Network (Market Volatility Analysis) with Pearson Correlation1,2,3,4 and conclude that the NLOK 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 Sell NLOK stock.

Financial State Forecast for NLOK NortonLifeLock Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B1B1
Operational Risk 8672
Market Risk6150
Technical Analysis7375
Fundamental Analysis5435
Risk Unsystematic3271

Prediction Confidence Score

Trust metric by Neural Network: 75 out of 100 with 765 signals.

References

  1. Bertsimas D, King A, Mazumder R. 2016. Best subset selection via a modern optimization lens. Ann. Stat. 44:813–52
  2. 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.
  3. Dimakopoulou M, Athey S, Imbens G. 2017. Estimation considerations in contextual bandits. arXiv:1711.07077 [stat.ML]
  4. V. Borkar. Q-learning for risk-sensitive control. Mathematics of Operations Research, 27:294–311, 2002.
  5. Hartigan JA, Wong MA. 1979. Algorithm as 136: a k-means clustering algorithm. J. R. Stat. Soc. Ser. C 28:100–8
  6. Breusch, T. S. A. R. Pagan (1979), "A simple test for heteroskedasticity and random coefficient variation," Econometrica, 47, 1287–1294.
  7. N. B ̈auerle and A. Mundt. Dynamic mean-risk optimization in a binomial model. Mathematical Methods of Operations Research, 70(2):219–239, 2009.
Frequently Asked QuestionsQ: What is the prediction methodology for NLOK stock?
A: NLOK stock prediction methodology: We evaluate the prediction models Modular Neural Network (Market Volatility Analysis) and Pearson Correlation
Q: Is NLOK stock a buy or sell?
A: The dominant strategy among neural network is to Sell NLOK Stock.
Q: Is NortonLifeLock stock a good investment?
A: The consensus rating for NortonLifeLock is Sell and assigned short-term B1 & long-term B1 forecasted stock rating.
Q: What is the consensus rating of NLOK stock?
A: The consensus rating for NLOK is Sell.
Q: What is the prediction period for NLOK stock?
A: The prediction period for NLOK is (n+4 weeks)

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