Modelling A.I. in Economics

Nordstrom Stock Forecast & Analysis (Forecast)

The prediction of a stock market direction may serve as an early recommendation system for short-term investors and as an early financial distress warning system for long-term shareholders. We evaluate Nordstrom prediction models with Modular Neural Network (Speculative Sentiment Analysis) and Statistical Hypothesis Testing1,2,3,4 and conclude that the JWN 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 JWN stock.


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

Key Points

  1. Dominated Move
  2. Buy, Sell and Hold Signals
  3. Market Outlook

JWN Target Price Prediction Modeling Methodology

Sentiment Analysis is new way of machine learning to extract opinion orientation (positive, negative, neutral) from a text segment written for any product, organization, person or any other entity. Sentiment Analysis can be used to predict the mood of people that have impact on stock prices, therefore it can help in prediction of actual stock movement. We consider Nordstrom Stock Decision Process with Statistical Hypothesis Testing where A is the set of discrete actions of JWN 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(Statistical Hypothesis Testing)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 (Speculative Sentiment Analysis)) X S(n):→ (n+4 weeks) R = 1 0 0 0 1 0 0 0 1

n:Time series to forecast

p:Price signals of JWN 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?

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


Sample Set: Neural Network
Stock/Index: JWN Nordstrom
Time series to forecast n: 14 Nov 2022 for (n+4 weeks)

According to price forecasts for (n+4 weeks) period: The dominant strategy among neural network is to Hold JWN 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 Nordstrom

  1. If, in applying paragraph 7.2.44, an entity reinstates a discontinued hedging relationship, the entity shall read references in paragraphs 6.9.11 and 6.9.12 to the date the alternative benchmark rate is designated as a noncontractually specified risk component for the first time as referring to the date of initial application of these amendments (ie the 24-month period for that alternative benchmark rate designated as a non-contractually specified risk component begins from the date of initial application of these amendments).
  2. For the purpose of determining whether a forecast transaction (or a component thereof) is highly probable as required by paragraph 6.3.3, an entity shall assume that the interest rate benchmark on which the hedged cash flows (contractually or non-contractually specified) are based is not altered as a result of interest rate benchmark reform.
  3. Accordingly the date of the modification shall be treated as the date of initial recognition of that financial asset when applying the impairment requirements to the modified financial asset. This typically means measuring the loss allowance at an amount equal to 12-month expected credit losses until the requirements for the recognition of lifetime expected credit losses in paragraph 5.5.3 are met. However, in some unusual circumstances following a modification that results in derecognition of the original financial asset, there may be evidence that the modified financial asset is credit-impaired at initial recognition, and thus, the financial asset should be recognised as an originated credit-impaired financial asset. This might occur, for example, in a situation in which there was a substantial modification of a distressed asset that resulted in the derecognition of the original financial asset. In such a case, it may be possible for the modification to result in a new financial asset which is credit-impaired at initial recognition.
  4. To the extent that a transfer of a financial asset does not qualify for derecognition, the transferee does not recognise the transferred asset as its asset. The transferee derecognises the cash or other consideration paid and recognises a receivable from the transferor. If the transferor has both a right and an obligation to reacquire control of the entire transferred asset for a fixed amount (such as under a repurchase agreement), the transferee may measure its receivable at amortised cost if it meets the criteria in paragraph 4.1.2.

*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

Nordstrom assigned short-term Ba1 & long-term B1 forecasted stock rating. We evaluate the prediction models Modular Neural Network (Speculative Sentiment Analysis) with Statistical Hypothesis Testing1,2,3,4 and conclude that the JWN 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 JWN stock.

Financial State Forecast for JWN Nordstrom Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*Ba1B1
Operational Risk 8757
Market Risk8454
Technical Analysis7449
Fundamental Analysis5578
Risk Unsystematic5039

Prediction Confidence Score

Trust metric by Neural Network: 72 out of 100 with 764 signals.

References

  1. J. Spall. Multivariate stochastic approximation using a simultaneous perturbation gradient approximation. IEEE Transactions on Automatic Control, 37(3):332–341, 1992.
  2. M. Colby, T. Duchow-Pressley, J. J. Chung, and K. Tumer. Local approximation of difference evaluation functions. In Proceedings of the Fifteenth International Joint Conference on Autonomous Agents and Multiagent Systems, Singapore, May 2016
  3. M. J. Hausknecht and P. Stone. Deep recurrent Q-learning for partially observable MDPs. CoRR, abs/1507.06527, 2015
  4. M. J. Hausknecht. Cooperation and Communication in Multiagent Deep Reinforcement Learning. PhD thesis, The University of Texas at Austin, 2016
  5. H. Kushner and G. Yin. Stochastic approximation algorithms and applications. Springer, 1997.
  6. Vapnik V. 2013. The Nature of Statistical Learning Theory. Berlin: Springer
  7. 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]
Frequently Asked QuestionsQ: What is the prediction methodology for JWN stock?
A: JWN stock prediction methodology: We evaluate the prediction models Modular Neural Network (Speculative Sentiment Analysis) and Statistical Hypothesis Testing
Q: Is JWN stock a buy or sell?
A: The dominant strategy among neural network is to Hold JWN Stock.
Q: Is Nordstrom stock a good investment?
A: The consensus rating for Nordstrom is Hold and assigned short-term Ba1 & long-term B1 forecasted stock rating.
Q: What is the consensus rating of JWN stock?
A: The consensus rating for JWN is Hold.
Q: What is the prediction period for JWN stock?
A: The prediction period for JWN is (n+4 weeks)

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