Modelling A.I. in Economics

Short/Long Term Stocks: Karachi 100 Index Stock Forecast

The nature of stock market movement has always been ambiguous for investors because of various influential factors. This study aims to significantly reduce the risk of trend prediction with machine learning and deep learning algorithms. We evaluate Karachi 100 Index prediction models with Supervised Machine Learning (ML) and Multiple Regression1,2,3,4 and conclude that the Karachi 100 Index stock is predictable in the short/long term. According to price forecasts for (n+8 weeks) period: The dominant strategy among neural network is to Buy Karachi 100 Index stock.


Keywords: Karachi 100 Index, Karachi 100 Index, stock forecast, machine learning based prediction, risk rating, buy-sell behaviour, stock analysis, target price analysis, options and futures.

Key Points

  1. Decision Making
  2. What are the most successful trading algorithms?
  3. What is neural prediction?

Karachi 100 Index Target Price Prediction Modeling Methodology

Stock prediction is a very hot topic in our life. However, in the early time, because of some reasons and the limitation of the device, only a few people had the access to the study. Thanks to the rapid development of science and technology, in recent years more and more people are devoted to the study of the prediction and it becomes easier and easier for us to make stock prediction by using different ways now, including machine learning, deep learning and so on. We consider Karachi 100 Index Stock Decision Process with Multiple Regression where A is the set of discrete actions of Karachi 100 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(Multiple Regression)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(Supervised Machine Learning (ML)) X S(n):→ (n+8 weeks) e x rx

n:Time series to forecast

p:Price signals of Karachi 100 Index 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?

Karachi 100 Index Stock Forecast (Buy or Sell) for (n+8 weeks)


Sample Set: Neural Network
Stock/Index: Karachi 100 Index Karachi 100 Index
Time series to forecast n: 03 Nov 2022 for (n+8 weeks)

According to price forecasts for (n+8 weeks) period: The dominant strategy among neural network is to Buy Karachi 100 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 Karachi 100 Index

  1. If, at the date of initial application, determining whether there has been a significant increase in credit risk since initial recognition would require undue cost or effort, an entity shall recognise a loss allowance at an amount equal to lifetime expected credit losses at each reporting date until that financial instrument is derecognised (unless that financial instrument is low credit risk at a reporting date, in which case paragraph 7.2.19(a) applies).
  2. The business model may be to hold assets to collect contractual cash flows even if the entity sells financial assets when there is an increase in the assets' credit risk. To determine whether there has been an increase in the assets' credit risk, the entity considers reasonable and supportable information, including forward looking information. Irrespective of their frequency and value, sales due to an increase in the assets' credit risk are not inconsistent with a business model whose objective is to hold financial assets to collect contractual cash flows because the credit quality of financial assets is relevant to the entity's ability to collect contractual cash flows. Credit risk management activities that are aimed at minimising potential credit losses due to credit deterioration are integral to such a business model. Selling a financial asset because it no longer meets the credit criteria specified in the entity's documented investment policy is an example of a sale that has occurred due to an increase in credit risk. However, in the absence of such a policy, the entity may demonstrate in other ways that the sale occurred due to an increase in credit risk.
  3. For floating-rate financial assets and floating-rate financial liabilities, periodic re-estimation of cash flows to reflect the movements in the market rates of interest alters the effective interest rate. If a floating-rate financial asset or a floating-rate financial liability is recognised initially at an amount equal to the principal receivable or payable on maturity, re-estimating the future interest payments normally has no significant effect on the carrying amount of the asset or the liability.
  4. If subsequently an entity reasonably expects that the alternative benchmark rate will not be separately identifiable within 24 months from the date the entity designated it as a non-contractually specified risk component for the first time, the entity shall cease applying the requirement in paragraph 6.9.11 to that alternative benchmark rate and discontinue hedge accounting prospectively from the date of that reassessment for all hedging relationships in which the alternative benchmark rate was designated as a noncontractually specified risk component.

*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

Karachi 100 Index assigned short-term B2 & long-term B2 forecasted stock rating. We evaluate the prediction models Supervised Machine Learning (ML) with Multiple Regression1,2,3,4 and conclude that the Karachi 100 Index stock is predictable in the short/long term. According to price forecasts for (n+8 weeks) period: The dominant strategy among neural network is to Buy Karachi 100 Index stock.

Financial State Forecast for Karachi 100 Index Karachi 100 Index Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B2B2
Operational Risk 4358
Market Risk5051
Technical Analysis3459
Fundamental Analysis5371
Risk Unsystematic8437

Prediction Confidence Score

Trust metric by Neural Network: 93 out of 100 with 470 signals.

References

  1. S. J. Russell and A. Zimdars. Q-decomposition for reinforcement learning agents. In Machine Learning, Proceedings of the Twentieth International Conference (ICML 2003), August 21-24, 2003, Washington, DC, USA, pages 656–663, 2003.
  2. R. Howard and J. Matheson. Risk sensitive Markov decision processes. Management Science, 18(7):356– 369, 1972
  3. Chow, G. C. (1960), "Tests of equality between sets of coefficients in two linear regressions," Econometrica, 28, 591–605.
  4. Breusch, T. S. A. R. Pagan (1979), "A simple test for heteroskedasticity and random coefficient variation," Econometrica, 47, 1287–1294.
  5. D. Bertsekas and J. Tsitsiklis. Neuro-dynamic programming. Athena Scientific, 1996.
  6. R. Rockafellar and S. Uryasev. Optimization of conditional value-at-risk. Journal of Risk, 2:21–42, 2000.
  7. Banerjee, A., J. J. Dolado, J. W. Galbraith, D. F. Hendry (1993), Co-integration, Error-correction, and the Econometric Analysis of Non-stationary Data. Oxford: Oxford University Press.
Frequently Asked QuestionsQ: What is the prediction methodology for Karachi 100 Index stock?
A: Karachi 100 Index stock prediction methodology: We evaluate the prediction models Supervised Machine Learning (ML) and Multiple Regression
Q: Is Karachi 100 Index stock a buy or sell?
A: The dominant strategy among neural network is to Buy Karachi 100 Index Stock.
Q: Is Karachi 100 Index stock a good investment?
A: The consensus rating for Karachi 100 Index is Buy and assigned short-term B2 & long-term B2 forecasted stock rating.
Q: What is the consensus rating of Karachi 100 Index stock?
A: The consensus rating for Karachi 100 Index is Buy.
Q: What is the prediction period for Karachi 100 Index stock?
A: The prediction period for Karachi 100 Index is (n+8 weeks)

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