## Summary

Nowadays, people show more and more enthusiasm for applying machine learning methods to finance domain. Many scholars and investors are trying to discover the mystery behind the stock market by applying deep learning. This thesis compares four machine learning methods: long short-term memory (LSTM), gated recurrent units (GRU), support vector machine (SVM), and eXtreme gradient boosting (XGBoost) to test which one performs the best in predicting the stock trend.** We evaluate Navient Corporation Common Stock prediction models with Modular Neural Network (CNN Layer) and Lasso Regression ^{1,2,3,4} and conclude that the NAVI 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 NAVI stock.**

## Key Points

- How do you pick a stock?
- Operational Risk
- Game Theory

## NAVI Target Price Prediction Modeling Methodology

We consider Navient Corporation Common Stock Decision Process with Modular Neural Network (CNN Layer) where A is the set of discrete actions of NAVI 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(Lasso Regression)

^{5,6,7}= $\begin{array}{cccc}{p}_{\mathrm{a}1}& {p}_{\mathrm{a}2}& \dots & {p}_{1n}\\ & \vdots \\ {p}_{j1}& {p}_{j2}& \dots & {p}_{jn}\\ & \vdots \\ {p}_{k1}& {p}_{k2}& \dots & {p}_{kn}\\ & \vdots \\ {p}_{n1}& {p}_{n2}& \dots & {p}_{nn}\end{array}$ X R(Modular Neural Network (CNN Layer)) X S(n):→ (n+16 weeks) $\sum _{i=1}^{n}\left({r}_{i}\right)$

n:Time series to forecast

p:Price signals of NAVI 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?

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

**Sample Set:**Neural Network

**Stock/Index:**NAVI Navient Corporation Common Stock

**Time series to forecast n: 29 Nov 2022**for (n+16 weeks)

**According to price forecasts for (n+16 weeks) period: The dominant strategy among neural network is to Hold NAVI 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 Navient Corporation Common Stock

- The methods used to determine whether credit risk has increased significantly on a financial instrument since initial recognition should consider the characteristics of the financial instrument (or group of financial instruments) and the default patterns in the past for comparable financial instruments. Despite the requirement in paragraph 5.5.9, for financial instruments for which default patterns are not concentrated at a specific point during the expected life of the financial instrument, changes in the risk of a default occurring over the next 12 months may be a reasonable approximation of the changes in the lifetime risk of a default occurring. In such cases, an entity may use changes in the risk of a default occurring over the next 12 months to determine whether credit risk has increased significantly since initial recognition, unless circumstances indicate that a lifetime assessment is necessary
- In addition to those hedging relationships specified in paragraph 6.9.1, an entity shall apply the requirements in paragraphs 6.9.11 and 6.9.12 to new hedging relationships in which an alternative benchmark rate is designated as a non-contractually specified risk component (see paragraphs 6.3.7(a) and B6.3.8) when, because of interest rate benchmark reform, that risk component is not separately identifiable at the date it is designated.
- Such designation may be used whether paragraph 4.3.3 requires the embedded derivatives to be separated from the host contract or prohibits such separation. However, paragraph 4.3.5 would not justify designating the hybrid contract as at fair value through profit or loss in the cases set out in paragraph 4.3.5(a) and (b) because doing so would not reduce complexity or increase reliability.
- An entity may manage and evaluate the performance of a group of financial liabilities or financial assets and financial liabilities in such a way that measuring that group at fair value through profit or loss results in more relevant information. The focus in this instance is on the way the entity manages and evaluates performance, instead of on the nature of its financial instruments.

*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

Navient Corporation Common Stock assigned short-term Ba3 & long-term B2 forecasted stock rating.** We evaluate the prediction models Modular Neural Network (CNN Layer) with Lasso Regression ^{1,2,3,4} and conclude that the NAVI 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 NAVI stock.**

### Financial State Forecast for NAVI Navient Corporation Common Stock Options & Futures

Rating | Short-Term | Long-Term Senior |
---|---|---|

Outlook* | Ba3 | B2 |

Operational Risk | 31 | 33 |

Market Risk | 68 | 30 |

Technical Analysis | 72 | 57 |

Fundamental Analysis | 62 | 62 |

Risk Unsystematic | 84 | 73 |

### Prediction Confidence Score

## References

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- H. Kushner and G. Yin. Stochastic approximation algorithms and applications. Springer, 1997.

## Frequently Asked Questions

Q: What is the prediction methodology for NAVI stock?A: NAVI stock prediction methodology: We evaluate the prediction models Modular Neural Network (CNN Layer) and Lasso Regression

Q: Is NAVI stock a buy or sell?

A: The dominant strategy among neural network is to Hold NAVI Stock.

Q: Is Navient Corporation Common Stock stock a good investment?

A: The consensus rating for Navient Corporation Common Stock is Hold and assigned short-term Ba3 & long-term B2 forecasted stock rating.

Q: What is the consensus rating of NAVI stock?

A: The consensus rating for NAVI is Hold.

Q: What is the prediction period for NAVI stock?

A: The prediction period for NAVI is (n+16 weeks)