Karachi 100 Index Research Report

## Summary

Accurate prediction of stock market returns is a very challenging task due to volatile and non-linear nature of the financial stock markets. With the introduction of artificial intelligence and increased computational capabilities, programmed methods of prediction have proved to be more efficient in predicting stock prices. We evaluate Karachi 100 Index prediction models with Active 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+1 year) period: The dominant strategy among neural network is to Sell Karachi 100 Index stock.

## Key Points

1. Can neural networks predict stock market?
2. What are buy sell or hold recommendations?
3. What is the use of Markov decision process?

## Karachi 100 Index Target Price Prediction Modeling Methodology

We consider Karachi 100 Index Stock Decision Process with Active Learning (ML) 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= $\begin{array}{cccc}{p}_{a1}& {p}_{a2}& \dots & {p}_{1n}\\ & ⋮\\ {p}_{j1}& {p}_{j2}& \dots & {p}_{jn}\\ & ⋮\\ {p}_{k1}& {p}_{k2}& \dots & {p}_{kn}\\ & ⋮\\ {p}_{n1}& {p}_{n2}& \dots & {p}_{nn}\end{array}$ X R(Active Learning (ML)) X S(n):→ (n+1 year) $∑ i = 1 n a i$

n:Time series to forecast

p:Price signals of Karachi 100 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?

## Karachi 100 Index Stock Forecast (Buy or Sell) for (n+1 year)

Sample Set: Neural Network
Stock/Index: Karachi 100 Index Karachi 100 Index
Time series to forecast n: 22 Nov 2022 for (n+1 year)

According to price forecasts for (n+1 year) period: The dominant strategy among neural network is to Sell 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. However, in some cases, the time value of money element may be modified (ie imperfect). That would be the case, for example, if a financial asset's interest rate is periodically reset but the frequency of that reset does not match the tenor of the interest rate (for example, the interest rate resets every month to a one-year rate) or if a financial asset's interest rate is periodically reset to an average of particular short- and long-term interest rates. In such cases, an entity must assess the modification to determine whether the contractual cash flows represent solely payments of principal and interest on the principal amount outstanding. In some circumstances, the entity may be able to make that determination by performing a qualitative assessment of the time value of money element whereas, in other circumstances, it may be necessary to perform a quantitative assessment.
2. Paragraph 4.1.1(a) requires an entity to classify financial assets on the basis of the entity's business model for managing the financial assets, unless paragraph 4.1.5 applies. An entity assesses whether its financial assets meet the condition in paragraph 4.1.2(a) or the condition in paragraph 4.1.2A(a) on the basis of the business model as determined by the entity's key management personnel (as defined in IAS 24 Related Party Disclosures).
3. However, depending on the nature of the financial instruments and the credit risk information available for particular groups of financial instruments, an entity may not be able to identify significant changes in credit risk for individual financial instruments before the financial instrument becomes past due. This may be the case for financial instruments such as retail loans for which there is little or no updated credit risk information that is routinely obtained and monitored on an individual instrument until a customer breaches the contractual terms. If changes in the credit risk for individual financial instruments are not captured before they become past due, a loss allowance based only on credit information at an individual financial instrument level would not faithfully represent the changes in credit risk since initial recognition.

*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 Caa2 & long-term Ba3 forecasted stock rating. We evaluate the prediction models Active 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+1 year) period: The dominant strategy among neural network is to Sell Karachi 100 Index stock.

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

Rating Short-Term Long-Term Senior
Outlook*Caa2Ba3
Operational Risk 6285
Market Risk5784
Technical Analysis3352
Fundamental Analysis3263
Risk Unsystematic3835

### Prediction Confidence Score

Trust metric by Neural Network: 72 out of 100 with 651 signals.

## References

1. Abadie A, Diamond A, Hainmueller J. 2015. Comparative politics and the synthetic control method. Am. J. Political Sci. 59:495–510
2. F. A. Oliehoek and C. Amato. A Concise Introduction to Decentralized POMDPs. SpringerBriefs in Intelligent Systems. Springer, 2016
3. Bierens HJ. 1987. Kernel estimators of regression functions. In Advances in Econometrics: Fifth World Congress, Vol. 1, ed. TF Bewley, pp. 99–144. Cambridge, UK: Cambridge Univ. Press
4. Abadie A, Diamond A, Hainmueller J. 2015. Comparative politics and the synthetic control method. Am. J. Political Sci. 59:495–510
5. Barrett, C. B. (1997), "Heteroscedastic price forecasting for food security management in developing countries," Oxford Development Studies, 25, 225–236.
6. A. Tamar and S. Mannor. Variance adjusted actor critic algorithms. arXiv preprint arXiv:1310.3697, 2013.
7. R. Sutton and A. Barto. Introduction to reinforcement learning. MIT Press, 1998
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 Active Learning (ML) and Multiple Regression
Q: Is Karachi 100 Index stock a buy or sell?
A: The dominant strategy among neural network is to Sell Karachi 100 Index Stock.
Q: Is Karachi 100 Index stock a good investment?
A: The consensus rating for Karachi 100 Index is Sell and assigned short-term Caa2 & long-term Ba3 forecasted stock rating.
Q: What is the consensus rating of Karachi 100 Index stock?
A: The consensus rating for Karachi 100 Index is Sell.
Q: What is the prediction period for Karachi 100 Index stock?
A: The prediction period for Karachi 100 Index is (n+1 year)