Should You Buy NG Right Now? (Stock Forecast)

Stock price prediction has always been a challenging task for the researchers in financial domain. While the Efficient Market Hypothesis claims that it is impossible to predict stock prices accurately, there are work in the literature that have demonstrated that stock price movements can be forecasted with a reasonable degree of accuracy, if appropriate variables are chosen and suitable predictive models are built using those variables. In this work, we present a robust and accurate framework of stock price prediction using statistical, machine learning and deep learning methods We evaluate National Grid plc prediction models with Modular Neural Network (Emotional Trigger/Responses Analysis) and Ridge Regression^1,2,3,4 and conclude that the NG 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 NG stock.

Keywords: NG, National Grid plc, stock forecast, machine learning based prediction, risk rating, buy-sell behaviour, stock analysis, target price analysis, options and futures.

Key Points

1. Prediction Modeling
2. Stock Forecast Based On a Predictive Algorithm
3. Understanding Buy, Sell, and Hold Ratings

NG Target Price Prediction Modeling Methodology

Stock prediction with data mining techniques is one of the most important issues in finance being investigated by researchers across the globe. Data mining techniques can be used extensively in the financial markets to help investors make qualitative decision. One of the techniques is artificial neural network (ANN). However, in the application of ANN for predicting the financial market the use of technical analysis variables for stock prediction is predominant. In this paper, we present a hybridized approach which combines the use of the variables of technical and fundamental analysis of stock market indicators for prediction of future price of stock in order to improve on the existing approaches. We consider National Grid plc Stock Decision Process with Ridge Regression where A is the set of discrete actions of NG 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(Ridge Regression)^5,6,7= $\begin{array}{cccc}{p}_{\mathrm{a}1}& p_{\mathrm{a}2}& \dots & p_{1n}\\ & ⋮\\ p_{j1}& p_{j2}& \dots & p_{jn}\\ & ⋮\\ p_{k1}& p_{k2}& \dots & p_{kn}\\ & ⋮\\ p_{n1}& p_{n2}& \dots & p_{nn}\end{array}$ X R(Modular Neural Network (Emotional Trigger/Responses Analysis)) X S(n):→ (n+8 weeks) $\sum _{i=1}^n\left(a_i\right)$

n:Time series to forecast

p:Price signals of NG 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?

NG Stock Forecast (Buy or Sell) for (n+8 weeks)

Sample Set: Neural Network
Stock/Index: NG National Grid plc
Time series to forecast n: 10 Nov 2022 for (n+8 weeks)

According to price forecasts for (n+8 weeks) period: The dominant strategy among neural network is to Hold NG 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 National Grid plc

1. For loan commitments, an entity considers changes in the risk of a default occurring on the loan to which a loan commitment relates. For financial guarantee contracts, an entity considers the changes in the risk that the specified debtor will default on the contract.
2. When determining whether the recognition of lifetime expected credit losses is required, an entity shall consider reasonable and supportable information that is available without undue cost or effort and that may affect the credit risk on a financial instrument in accordance with paragraph 5.5.17(c). An entity need not undertake an exhaustive search for information when determining whether credit risk has increased significantly since initial recognition.
3. An entity is not required to restate prior periods to reflect the application of these amendments. The entity may restate prior periods if, and only if, it is possible without the use of hindsight and the restated financial statements reflect all the requirements in this Standard. If an entity does not restate prior periods, the entity shall recognise any difference between the previous carrying amount and the carrying amount at the beginning of the annual reporting period that includes the date of initial application of these amendments in the opening retained earnings (or other component of equity, as appropriate) of the annual reporting period that includes the date of initial application of these amendments.
4. If an entity prepares interim financial reports in accordance with IAS 34 Interim Financial Reporting the entity need not apply the requirements in this Standard to interim periods prior to the date of initial application if it is impracticable (as defined in IAS 8).

*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

National Grid plc assigned short-term B1 & long-term Ba1 forecasted stock rating. We evaluate the prediction models Modular Neural Network (Emotional Trigger/Responses Analysis) with Ridge Regression^1,2,3,4 and conclude that the NG 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 NG stock.

Financial State Forecast for NG National Grid plc Stock Options & Futures

Rating	Short-Term	Long-Term Senior
Outlook*	B1	Ba1
Operational Risk	78	63
Market Risk	76	82
Technical Analysis	76	89
Fundamental Analysis	31	68
Risk Unsystematic	42	48

Prediction Confidence Score

Trust metric by Neural Network: 79 out of 100 with 576 signals.

References

1. Varian HR. 2014. Big data: new tricks for econometrics. J. Econ. Perspect. 28:3–28
2. Bengio Y, Ducharme R, Vincent P, Janvin C. 2003. A neural probabilistic language model. J. Mach. Learn. Res. 3:1137–55
3. H. Kushner and G. Yin. Stochastic approximation algorithms and applications. Springer, 1997.
4. P. Artzner, F. Delbaen, J. Eber, and D. Heath. Coherent measures of risk. Journal of Mathematical Finance, 9(3):203–228, 1999
5. Efron B, Hastie T, Johnstone I, Tibshirani R. 2004. Least angle regression. Ann. Stat. 32:407–99
6. L. Busoniu, R. Babuska, and B. D. Schutter. A comprehensive survey of multiagent reinforcement learning. IEEE Transactions of Systems, Man, and Cybernetics Part C: Applications and Reviews, 38(2), 2008.
7. K. Tuyls and G. Weiss. Multiagent learning: Basics, challenges, and prospects. AI Magazine, 33(3): 41–52, 2012

Frequently Asked Questions

Q: What is the prediction methodology for NG stock?
A: NG stock prediction methodology: We evaluate the prediction models Modular Neural Network (Emotional Trigger/Responses Analysis) and Ridge Regression
Q: Is NG stock a buy or sell?
A: The dominant strategy among neural network is to Hold NG Stock.
Q: Is National Grid plc stock a good investment?
A: The consensus rating for National Grid plc is Hold and assigned short-term B1 & long-term Ba1 forecasted stock rating.
Q: What is the consensus rating of NG stock?
A: The consensus rating for NG is Hold.
Q: What is the prediction period for NG stock?
A: The prediction period for NG is (n+8 weeks)

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