RED CAPITAL PLC Stock Forecast, Price & Rating (LON:REDC)

This paper proposes genetic algorithms (GAs) approach to feature discretization and the determination of connection weights for artificial neural networks (ANNs) to predict the stock price index. Previous research proposed many hybrid models of ANN and GA for the method of training the network, feature subset selection, and topology optimization. We evaluate RED CAPITAL PLC prediction models with Statistical Inference (ML) and Sign Test1,2,3,4 and conclude that the LON:REDC stock is predictable in the short/long term. According to price forecasts for (n+3 month) period: The dominant strategy among neural network is to Sell LON:REDC stock.


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

Key Points

  1. What is statistical models in machine learning?
  2. Should I buy stocks now or wait amid such uncertainty?
  3. Market Outlook

LON:REDC Target Price Prediction Modeling Methodology

Machine learning addresses the question of how to build computers that improve automatically through experience. It is one of today's most rapidly growing technical fields, lying at the intersection of computer science and statistics, and at the core of artificial intelligence and data science. We consider RED CAPITAL PLC Stock Decision Process with Sign Test where A is the set of discrete actions of LON:REDC 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(Sign 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+3 month) i = 1 n r i

n:Time series to forecast

p:Price signals of LON:REDC 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:REDC Stock Forecast (Buy or Sell) for (n+3 month)


Sample Set: Neural Network
Stock/Index: LON:REDC RED CAPITAL PLC
Time series to forecast n: 11 Nov 2022 for (n+3 month)

According to price forecasts for (n+3 month) period: The dominant strategy among neural network is to Sell LON:REDC 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 RED CAPITAL PLC

  1. Adjusting the hedge ratio by increasing the volume of the hedging instrument does not affect how the changes in the value of the hedged item are measured. The measurement of the changes in the fair value of the hedging instrument related to the previously designated volume also remains unaffected. However, from the date of rebalancing, the changes in the fair value of the hedging instrument also include the changes in the value of the additional volume of the hedging instrument. The changes are measured starting from, and by reference to, the date of rebalancing instead of the date on which the hedging relationship was designated. For example, if an entity originally hedged the price risk of a commodity using a derivative volume of 100 tonnes as the hedging instrument and added a volume of 10 tonnes on rebalancing, the hedging instrument after rebalancing would comprise a total derivative volume of 110 tonnes. The change in the fair value of the hedging instrument is the total change in the fair value of the derivatives that make up the total volume of 110 tonnes. These derivatives could (and probably would) have different critical terms, such as their forward rates, because they were entered into at different points in time (including the possibility of designating derivatives into hedging relationships after their initial recognition).
  2. A contractual cash flow characteristic does not affect the classification of the financial asset if it could have only a de minimis effect on the contractual cash flows of the financial asset. To make this determination, an entity must consider the possible effect of the contractual cash flow characteristic in each reporting period and cumulatively over the life of the financial instrument. In addition, if a contractual cash flow characteristic could have an effect on the contractual cash flows that is more than de minimis (either in a single reporting period or cumulatively) but that cash flow characteristic is not genuine, it does not affect the classification of a financial asset. A cash flow characteristic is not genuine if it affects the instrument's contractual cash flows only on the occurrence of an event that is extremely rare, highly abnormal and very unlikely to occur.
  3. One of the defining characteristics of a derivative is that it has an initial net investment that is smaller than would be required for other types of contracts that would be expected to have a similar response to changes in market factors. An option contract meets that definition because the premium is less than the investment that would be required to obtain the underlying financial instrument to which the option is linked. A currency swap that requires an initial exchange of different currencies of equal fair values meets the definition because it has a zero initial net investment.
  4. 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

*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

RED CAPITAL PLC assigned short-term Baa2 & long-term Ba2 forecasted stock rating. We evaluate the prediction models Statistical Inference (ML) with Sign Test1,2,3,4 and conclude that the LON:REDC stock is predictable in the short/long term. According to price forecasts for (n+3 month) period: The dominant strategy among neural network is to Sell LON:REDC stock.

Financial State Forecast for LON:REDC RED CAPITAL PLC Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*Baa2Ba2
Operational Risk 5988
Market Risk8055
Technical Analysis6868
Fundamental Analysis7670
Risk Unsystematic8754

Prediction Confidence Score

Trust metric by Neural Network: 75 out of 100 with 788 signals.

References

  1. E. Collins. Using Markov decision processes to optimize a nonlinear functional of the final distribution, with manufacturing applications. In Stochastic Modelling in Innovative Manufacturing, pages 30–45. Springer, 1997
  2. 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.
  3. Vapnik V. 2013. The Nature of Statistical Learning Theory. Berlin: Springer
  4. S. Bhatnagar and K. Lakshmanan. An online actor-critic algorithm with function approximation for con- strained Markov decision processes. Journal of Optimization Theory and Applications, 153(3):688–708, 2012.
  5. J. G. Schneider, W. Wong, A. W. Moore, and M. A. Riedmiller. Distributed value functions. In Proceedings of the Sixteenth International Conference on Machine Learning (ICML 1999), Bled, Slovenia, June 27 - 30, 1999, pages 371–378, 1999.
  6. V. Borkar. A sensitivity formula for the risk-sensitive cost and the actor-critic algorithm. Systems & Control Letters, 44:339–346, 2001
  7. M. L. Littman. Friend-or-foe q-learning in general-sum games. In Proceedings of the Eighteenth International Conference on Machine Learning (ICML 2001), Williams College, Williamstown, MA, USA, June 28 - July 1, 2001, pages 322–328, 2001
Frequently Asked QuestionsQ: What is the prediction methodology for LON:REDC stock?
A: LON:REDC stock prediction methodology: We evaluate the prediction models Statistical Inference (ML) and Sign Test
Q: Is LON:REDC stock a buy or sell?
A: The dominant strategy among neural network is to Sell LON:REDC Stock.
Q: Is RED CAPITAL PLC stock a good investment?
A: The consensus rating for RED CAPITAL PLC is Sell and assigned short-term Baa2 & long-term Ba2 forecasted stock rating.
Q: What is the consensus rating of LON:REDC stock?
A: The consensus rating for LON:REDC is Sell.
Q: What is the prediction period for LON:REDC stock?
A: The prediction period for LON:REDC is (n+3 month)

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