We present an Artificial Neural Network (ANN) approach to predict stock market indices, particularly with respect to the forecast of their trend movements up or down. Exploiting different Neural Networks architectures, we provide numerical analysis of concrete financial time series. In particular, after a brief r ́esum ́e of the existing literature on the subject, we consider the Multi-layer Perceptron (MLP), the Convolutional Neural Net- works (CNN), and the Long Short-Term Memory (LSTM) recurrent neural networks techniques. We evaluate MarketAxess prediction models with Modular Neural Network (CNN Layer) and Polynomial Regression1,2,3,4 and conclude that the MKTX stock is predictable in the short/long term. According to price forecasts for (n+1 year) period: The dominant strategy among neural network is to SellHold MKTX stock.

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

Key Points

1. What are main components of Markov decision process?
3. Short/Long Term Stocks

MKTX Target Price Prediction Modeling Methodology

Stocks are possibly the most popular financial instrument invented for building wealth and are the centerpiece of any investment portfolio. The advances in trading technology has opened up the markets so that nowadays nearly anybody can own stocks. From last few decades, there seen explosive increase in the average person's interest for stock market. In a financially explosive market, as the stock market, it is important to have a very accurate prediction of a future trend. Because of the financial crisis and recording profits, it is compulsory to have a secure prediction of the values of the stocks. Predicting a non-linear signal requires progressive algorithms of machine learning with help of Artificial Intelligence (AI). We consider MarketAxess Stock Decision Process with Polynomial Regression where A is the set of discrete actions of MKTX 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(Polynomial Regression)5,6,7= $\begin{array}{cccc}{p}_{a1}& {p}_{a2}& \dots & {p}_{1n}\\ & ⋮\\ {p}_{j1}& {p}_{j2}& \dots & {p}_{jn}\\ & ⋮\\ {p}_{k1}& {p}_{k2}& \dots & {p}_{kn}\\ & ⋮\\ {p}_{n1}& {p}_{n2}& \dots & {p}_{nn}\end{array}$ X R(Modular Neural Network (CNN Layer)) X S(n):→ (n+1 year) $∑ i = 1 n r i$

n:Time series to forecast

p:Price signals of MKTX 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?

MKTX Stock Forecast (Buy or Sell) for (n+1 year)

Sample Set: Neural Network
Stock/Index: MKTX MarketAxess
Time series to forecast n: 12 Nov 2022 for (n+1 year)

According to price forecasts for (n+1 year) period: The dominant strategy among neural network is to SellHold MKTX 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 MarketAxess

1. A hedge of a firm commitment (for example, a hedge of the change in fuel price relating to an unrecognised contractual commitment by an electric utility to purchase fuel at a fixed price) is a hedge of an exposure to a change in fair value. Accordingly, such a hedge is a fair value hedge. However, in accordance with paragraph 6.5.4, a hedge of the foreign currency risk of a firm commitment could alternatively be accounted for as a cash flow hedge.
2. IFRS 7 defines credit risk as 'the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation'. The requirement in paragraph 5.7.7(a) relates to the risk that the issuer will fail to perform on that particular liability. It does not necessarily relate to the creditworthiness of the issuer. For example, if an entity issues a collateralised liability and a non-collateralised liability that are otherwise identical, the credit risk of those two liabilities will be different, even though they are issued by the same entity. The credit risk on the collateralised liability will be less than the credit risk of the non-collateralised liability. The credit risk for a collateralised liability may be close to zero.
3. An entity shall apply this Standard retrospectively, in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, except as specified in paragraphs 7.2.4–7.2.26 and 7.2.28. This Standard shall not be applied to items that have already been derecognised at the date of initial application.
4. 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.

*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

MarketAxess assigned short-term B2 & long-term Ba2 forecasted stock rating. We evaluate the prediction models Modular Neural Network (CNN Layer) with Polynomial Regression1,2,3,4 and conclude that the MKTX stock is predictable in the short/long term. According to price forecasts for (n+1 year) period: The dominant strategy among neural network is to SellHold MKTX stock.

Financial State Forecast for MKTX MarketAxess Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B2Ba2
Operational Risk 3875
Market Risk7245
Technical Analysis4984
Fundamental Analysis4877
Risk Unsystematic7461

Prediction Confidence Score

Trust metric by Neural Network: 93 out of 100 with 823 signals.

References

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2. Bengio Y, Ducharme R, Vincent P, Janvin C. 2003. A neural probabilistic language model. J. Mach. Learn. Res. 3:1137–55
3. Firth JR. 1957. A synopsis of linguistic theory 1930–1955. In Studies in Linguistic Analysis (Special Volume of the Philological Society), ed. JR Firth, pp. 1–32. Oxford, UK: Blackwell
4. Schapire RE, Freund Y. 2012. Boosting: Foundations and Algorithms. Cambridge, MA: MIT Press
5. M. Ono, M. Pavone, Y. Kuwata, and J. Balaram. Chance-constrained dynamic programming with application to risk-aware robotic space exploration. Autonomous Robots, 39(4):555–571, 2015
6. J. Baxter and P. Bartlett. Infinite-horizon policy-gradient estimation. Journal of Artificial Intelligence Re- search, 15:319–350, 2001.
7. Bottou L. 1998. Online learning and stochastic approximations. In On-Line Learning in Neural Networks, ed. D Saad, pp. 9–42. New York: ACM
Frequently Asked QuestionsQ: What is the prediction methodology for MKTX stock?
A: MKTX stock prediction methodology: We evaluate the prediction models Modular Neural Network (CNN Layer) and Polynomial Regression
Q: Is MKTX stock a buy or sell?
A: The dominant strategy among neural network is to SellHold MKTX Stock.
Q: Is MarketAxess stock a good investment?
A: The consensus rating for MarketAxess is SellHold and assigned short-term B2 & long-term Ba2 forecasted stock rating.
Q: What is the consensus rating of MKTX stock?
A: The consensus rating for MKTX is SellHold.
Q: What is the prediction period for MKTX stock?
A: The prediction period for MKTX is (n+1 year)