Modelling A.I. in Economics

Shanghai Composite Index Shanghai Composite Index (Forecast)

Shanghai Composite Index Research Report

Summary

The stock market is an interesting industry to study. There are various variations present in it. Many experts have been studying and researching on the various trends that the stock market goes through. One of the major studies has been the attempt to predict the stock prices of various companies based on historical data. Prediction of stock prices will greatly help people to understand where and how to invest so that the risk of losing money is minimized. We evaluate Shanghai Composite Index prediction models with Modular Neural Network (Market News Sentiment Analysis) and Wilcoxon Rank-Sum Test1,2,3,4 and conclude that the Shanghai Composite Index 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 Buy Shanghai Composite Index stock.

Key Points

  1. Should I buy stocks now or wait amid such uncertainty?
  2. Nash Equilibria
  3. Short/Long Term Stocks

Shanghai Composite Index Target Price Prediction Modeling Methodology

We consider Shanghai Composite Index Stock Decision Process with Modular Neural Network (Market News Sentiment Analysis) where A is the set of discrete actions of Shanghai Composite Index 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 Rank-Sum 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(Modular Neural Network (Market News Sentiment Analysis)) X S(n):→ (n+16 weeks) S = s 1 s 2 s 3

n:Time series to forecast

p:Price signals of Shanghai Composite Index 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?

Shanghai Composite Index Stock Forecast (Buy or Sell) for (n+16 weeks)

Sample Set: Neural Network
Stock/Index: Shanghai Composite Index Shanghai Composite Index
Time series to forecast n: 28 Nov 2022 for (n+16 weeks)

According to price forecasts for (n+16 weeks) period: The dominant strategy among neural network is to Buy Shanghai Composite Index 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 Shanghai Composite Index

  1. Lifetime expected credit losses are not recognised on a financial instrument simply because it was considered to have low credit risk in the previous reporting period and is not considered to have low credit risk at the reporting date. In such a case, an entity shall determine whether there has been a significant increase in credit risk since initial recognition and thus whether lifetime expected credit losses are required to be recognised in accordance with paragraph 5.5.3.
  2. However, the designation of the hedging relationship using the same hedge ratio as that resulting from the quantities of the hedged item and the hedging instrument that the entity actually uses shall not reflect an imbalance between the weightings of the hedged item and the hedging instrument that would in turn 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. Hence, for the purpose of designating a hedging relationship, an entity must adjust the hedge ratio that results from the quantities of the hedged item and the hedging instrument that the entity actually uses if that is needed to avoid such an imbalance
  3. For some types of fair value hedges, the objective of the hedge is not primarily to offset the fair value change of the hedged item but instead to transform the cash flows of the hedged item. For example, an entity hedges the fair value interest rate risk of a fixed-rate debt instrument using an interest rate swap. The entity's hedge objective is to transform the fixed-interest cash flows into floating interest cash flows. This objective is reflected in the accounting for the hedging relationship by accruing the net interest accrual on the interest rate swap in profit or loss. In the case of a hedge of a net position (for example, a net position of a fixed-rate asset and a fixed-rate liability), this net interest accrual must be presented in a separate line item in the statement of profit or loss and other comprehensive income. This is to avoid the grossing up of a single instrument's net gains or losses into offsetting gross amounts and recognising them in different line items (for example, this avoids grossing up a net interest receipt on a single interest rate swap into gross interest revenue and gross interest expense).
  4. When designating a hedging relationship and on an ongoing basis, an entity shall analyse the sources of hedge ineffectiveness that are expected to affect the hedging relationship during its term. This analysis (including any updates in accordance with paragraph B6.5.21 arising from rebalancing a hedging relationship) is the basis for the entity's assessment of meeting the hedge effectiveness requirements.

*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

Shanghai Composite Index assigned short-term B1 & long-term B2 forecasted stock rating. We evaluate the prediction models Modular Neural Network (Market News Sentiment Analysis) with Wilcoxon Rank-Sum Test1,2,3,4 and conclude that the Shanghai Composite Index 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 Buy Shanghai Composite Index stock.

Financial State Forecast for Shanghai Composite Index Shanghai Composite Index Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B1B2
Operational Risk 5561
Market Risk5640
Technical Analysis3974
Fundamental Analysis8062
Risk Unsystematic7833

Prediction Confidence Score

Trust metric by Neural Network: 74 out of 100 with 730 signals.

References

  1. Van der Vaart AW. 2000. Asymptotic Statistics. Cambridge, UK: Cambridge Univ. Press
  2. M. J. Hausknecht. Cooperation and Communication in Multiagent Deep Reinforcement Learning. PhD thesis, The University of Texas at Austin, 2016
  3. Abadie A, Diamond A, Hainmueller J. 2015. Comparative politics and the synthetic control method. Am. J. Political Sci. 59:495–510
  4. Breiman L. 2001a. Random forests. Mach. Learn. 45:5–32
  5. Friedberg R, Tibshirani J, Athey S, Wager S. 2018. Local linear forests. arXiv:1807.11408 [stat.ML]
  6. Mnih A, Teh YW. 2012. A fast and simple algorithm for training neural probabilistic language models. In Proceedings of the 29th International Conference on Machine Learning, pp. 419–26. La Jolla, CA: Int. Mach. Learn. Soc.
  7. Arora S, Li Y, Liang Y, Ma T. 2016. RAND-WALK: a latent variable model approach to word embeddings. Trans. Assoc. Comput. Linguist. 4:385–99
Frequently Asked QuestionsQ: What is the prediction methodology for Shanghai Composite Index stock?
A: Shanghai Composite Index stock prediction methodology: We evaluate the prediction models Modular Neural Network (Market News Sentiment Analysis) and Wilcoxon Rank-Sum Test
Q: Is Shanghai Composite Index stock a buy or sell?
A: The dominant strategy among neural network is to Buy Shanghai Composite Index Stock.
Q: Is Shanghai Composite Index stock a good investment?
A: The consensus rating for Shanghai Composite Index is Buy and assigned short-term B1 & long-term B2 forecasted stock rating.
Q: What is the consensus rating of Shanghai Composite Index stock?
A: The consensus rating for Shanghai Composite Index is Buy.
Q: What is the prediction period for Shanghai Composite Index stock?
A: The prediction period for Shanghai Composite Index is (n+16 weeks)

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