Modelling A.I. in Economics

Should You Buy LON:OSB Right Now? (Stock Forecast)

Financial markets are fascinating if you can predict them. Also, the traders acting on financial markets produce a vast amount of information to analyse the consequences of investing according to the current market trends. Stock Market prediction is the technique to determine whether stock value will go up or down as it plays an active role in the financial gain of nation's economic status. We evaluate OSB GROUP PLC prediction models with Supervised Machine Learning (ML) and ElasticNet Regression1,2,3,4 and conclude that the LON:OSB 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 Hold LON:OSB stock.


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

Key Points

  1. Can stock prices be predicted?
  2. Can we predict stock market using machine learning?
  3. Probability Distribution

LON:OSB Target Price Prediction Modeling Methodology

The categorization of high dimensional data present a fascinating challenge to machine learning models as frequent number of highly correlated dimensions or attributes can affect the accuracy of classification model. In this paper, the problem of high dimensionality of stock exchange is investigated to predict the market trends by applying the principal component analysis (PCA) with linear regression. PCA can help to improve the predictive performance of machine learning methods while reducing the redundancy among the data. We consider OSB GROUP PLC Stock Decision Process with ElasticNet Regression where A is the set of discrete actions of LON:OSB 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(ElasticNet 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) R = 1 0 0 0 1 0 0 0 1

n:Time series to forecast

p:Price signals of LON:OSB 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:OSB Stock Forecast (Buy or Sell) for (n+8 weeks)


Sample Set: Neural Network
Stock/Index: LON:OSB OSB GROUP PLC
Time series to forecast n: 04 Nov 2022 for (n+8 weeks)

According to price forecasts for (n+8 weeks) period: The dominant strategy among neural network is to Hold LON:OSB 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 OSB GROUP PLC

  1. When an entity, consistent with its hedge documentation, frequently resets (ie discontinues and restarts) a hedging relationship because both the hedging instrument and the hedged item frequently change (ie the entity uses a dynamic process in which both the hedged items and the hedging instruments used to manage that exposure do not remain the same for long), the entity shall apply the requirement in paragraphs 6.3.7(a) and B6.3.8—that the risk component is separately identifiable—only when it initially designates a hedged item in that hedging relationship. A hedged item that has been assessed at the time of its initial designation in the hedging relationship, whether it was at the time of the hedge inception or subsequently, is not reassessed at any subsequent redesignation in the same hedging relationship.
  2. Interest Rate Benchmark Reform, which amended IFRS 9, IAS 39 and IFRS 7, issued in September 2019, added Section 6.8 and amended paragraph 7.2.26. An entity shall apply these amendments for annual periods beginning on or after 1 January 2020. Earlier application is permitted. If an entity applies these amendments for an earlier period, it shall disclose that fact.
  3. An entity's business model refers to how an entity manages its financial assets in order to generate cash flows. That is, the entity's business model determines whether cash flows will result from collecting contractual cash flows, selling financial assets or both. Consequently, this assessment is not performed on the basis of scenarios that the entity does not reasonably expect to occur, such as so-called 'worst case' or 'stress case' scenarios. For example, if an entity expects that it will sell a particular portfolio of financial assets only in a stress case scenario, that scenario would not affect the entity's assessment of the business model for those assets if the entity reasonably expects that such a scenario will not occur. If cash flows are realised in a way that is different from the entity's expectations at the date that the entity assessed the business model (for example, if the entity sells more or fewer financial assets than it expected when it classified the assets), that does not give rise to a prior period error in the entity's financial statements (see IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors) nor does it change the classification of the remaining financial assets held in that business model (ie those assets that the entity recognised in prior periods and still holds) as long as the entity considered all relevant information that was available at the time that it made the business model assessment.
  4. For example, when the critical terms (such as the nominal amount, maturity and underlying) of the hedging instrument and the hedged item match or are closely aligned, it might be possible for an entity to conclude on the basis of a qualitative assessment of those critical terms that the hedging instrument and the hedged item have values that will generally move in the opposite direction because of the same risk and hence that an economic relationship exists between the hedged item and the hedging instrument (see paragraphs B6.4.4–B6.4.6).

*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

OSB GROUP PLC assigned short-term B2 & long-term Ba1 forecasted stock rating. We evaluate the prediction models Supervised Machine Learning (ML) with ElasticNet Regression1,2,3,4 and conclude that the LON:OSB 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 Hold LON:OSB stock.

Financial State Forecast for LON:OSB OSB GROUP PLC Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B2Ba1
Operational Risk 8990
Market Risk3362
Technical Analysis4569
Fundamental Analysis5050
Risk Unsystematic4482

Prediction Confidence Score

Trust metric by Neural Network: 79 out of 100 with 578 signals.

References

  1. S. Bhatnagar, H. Prasad, and L. Prashanth. Stochastic recursive algorithms for optimization, volume 434. Springer, 2013
  2. Chen, C. L. Liu (1993), "Joint estimation of model parameters and outlier effects in time series," Journal of the American Statistical Association, 88, 284–297.
  3. V. Konda and J. Tsitsiklis. Actor-Critic algorithms. In Proceedings of Advances in Neural Information Processing Systems 12, pages 1008–1014, 2000
  4. A. Eck, L. Soh, S. Devlin, and D. Kudenko. Potential-based reward shaping for finite horizon online POMDP planning. Autonomous Agents and Multi-Agent Systems, 30(3):403–445, 2016
  5. Athey S, Imbens G. 2016. Recursive partitioning for heterogeneous causal effects. PNAS 113:7353–60
  6. Bottou L. 2012. Stochastic gradient descent tricks. In Neural Networks: Tricks of the Trade, ed. G Montavon, G Orr, K-R Müller, pp. 421–36. Berlin: Springer
  7. S. Bhatnagar. An actor-critic algorithm with function approximation for discounted cost constrained Markov decision processes. Systems & Control Letters, 59(12):760–766, 2010
Frequently Asked QuestionsQ: What is the prediction methodology for LON:OSB stock?
A: LON:OSB stock prediction methodology: We evaluate the prediction models Supervised Machine Learning (ML) and ElasticNet Regression
Q: Is LON:OSB stock a buy or sell?
A: The dominant strategy among neural network is to Hold LON:OSB Stock.
Q: Is OSB GROUP PLC stock a good investment?
A: The consensus rating for OSB GROUP PLC is Hold and assigned short-term B2 & long-term Ba1 forecasted stock rating.
Q: What is the consensus rating of LON:OSB stock?
A: The consensus rating for LON:OSB is Hold.
Q: What is the prediction period for LON:OSB stock?
A: The prediction period for LON:OSB is (n+8 weeks)



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