Modelling A.I. in Economics

Should You Buy Now or Wait? PCTY Stock Forecast (Forecast)

Predictions on stock market prices are a great challenge due to the fact that it is an immensely complex, chaotic and dynamic environment. There are many studies from various areas aiming to take on that challenge and Machine Learning approaches have been the focus of many of them. There are many examples of Machine Learning algorithms been able to reach satisfactory results when doing that type of prediction. This article studies the usage of LSTM networks on that scenario, to predict future trends of stock prices based on the price history, alongside with technical analysis indicators. We evaluate Paylocity prediction models with Transductive Learning (ML) and Lasso Regression1,2,3,4 and conclude that the PCTY stock is predictable in the short/long term. According to price forecasts for (n+3 month) period: The dominant strategy among neural network is to Sell PCTY stock.


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

Key Points

  1. Is Target price a good indicator?
  2. Why do we need predictive models?
  3. How can neural networks improve predictions?

PCTY Target Price Prediction Modeling Methodology

As stock data is characterized by highly noisy and non-stationary, stock price prediction is regarded as a knotty problem. In this paper, we propose new two-stage ensemble models by combining empirical mode decomposition (EMD) (or variational mode decomposition (VMD)), extreme learning machine (ELM) and improved harmony search (IHS) algorithm for stock price prediction, which are respectively named EMD–ELM–IHS and VMD–ELM–IHS. We consider Paylocity Stock Decision Process with Lasso Regression where A is the set of discrete actions of PCTY 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(Lasso 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(Transductive Learning (ML)) X S(n):→ (n+3 month) e x rx

n:Time series to forecast

p:Price signals of PCTY 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?

PCTY Stock Forecast (Buy or Sell) for (n+3 month)


Sample Set: Neural Network
Stock/Index: PCTY Paylocity
Time series to forecast n: 08 Nov 2022 for (n+3 month)

According to price forecasts for (n+3 month) period: The dominant strategy among neural network is to Sell PCTY 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 Paylocity

  1. An entity's risk management is the main source of information to perform the assessment of whether a hedging relationship meets the hedge effectiveness requirements. This means that the management information (or analysis) used for decision-making purposes can be used as a basis for assessing whether a hedging relationship meets the hedge effectiveness requirements.
  2. An entity's estimate of expected credit losses on loan commitments shall be consistent with its expectations of drawdowns on that loan commitment, ie it shall consider the expected portion of the loan commitment that will be drawn down within 12 months of the reporting date when estimating 12-month expected credit losses, and the expected portion of the loan commitment that will be drawn down over the expected life of the loan commitment when estimating lifetime expected credit losses.
  3. The definition of a derivative refers to non-financial variables that are not specific to a party to the contract. These include an index of earthquake losses in a particular region and an index of temperatures in a particular city. Non-financial variables specific to a party to the contract include the occurrence or non-occurrence of a fire that damages or destroys an asset of a party to the contract. A change in the fair value of a non-financial asset is specific to the owner if the fair value reflects not only changes in market prices for such assets (a financial variable) but also the condition of the specific non-financial asset held (a non-financial variable). For example, if a guarantee of the residual value of a specific car exposes the guarantor to the risk of changes in the car's physical condition, the change in that residual value is specific to the owner of the car.
  4. IFRS 16, issued in January 2016, amended paragraphs 2.1, 5.5.15, B4.3.8, B5.5.34 and B5.5.46. An entity shall apply those amendments when it applies IFRS 16.

*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

Paylocity assigned short-term B2 & long-term Ba2 forecasted stock rating. We evaluate the prediction models Transductive Learning (ML) with Lasso Regression1,2,3,4 and conclude that the PCTY stock is predictable in the short/long term. According to price forecasts for (n+3 month) period: The dominant strategy among neural network is to Sell PCTY stock.

Financial State Forecast for PCTY Paylocity Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B2Ba2
Operational Risk 5149
Market Risk5264
Technical Analysis7778
Fundamental Analysis5187
Risk Unsystematic4958

Prediction Confidence Score

Trust metric by Neural Network: 78 out of 100 with 665 signals.

References

  1. Hirano K, Porter JR. 2009. Asymptotics for statistical treatment rules. Econometrica 77:1683–701
  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. Belloni A, Chernozhukov V, Hansen C. 2014. High-dimensional methods and inference on structural and treatment effects. J. Econ. Perspect. 28:29–50
  4. Bera, A. M. L. Higgins (1997), "ARCH and bilinearity as competing models for nonlinear dependence," Journal of Business Economic Statistics, 15, 43–50.
  5. Cheung, Y. M.D. Chinn (1997), "Further investigation of the uncertain unit root in GNP," Journal of Business and Economic Statistics, 15, 68–73.
  6. Athey S, Bayati M, Imbens G, Zhaonan Q. 2019. Ensemble methods for causal effects in panel data settings. NBER Work. Pap. 25675
  7. S. Devlin, L. Yliniemi, D. Kudenko, and K. Tumer. Potential-based difference rewards for multiagent reinforcement learning. In Proceedings of the Thirteenth International Joint Conference on Autonomous Agents and Multiagent Systems, May 2014
Frequently Asked QuestionsQ: What is the prediction methodology for PCTY stock?
A: PCTY stock prediction methodology: We evaluate the prediction models Transductive Learning (ML) and Lasso Regression
Q: Is PCTY stock a buy or sell?
A: The dominant strategy among neural network is to Sell PCTY Stock.
Q: Is Paylocity stock a good investment?
A: The consensus rating for Paylocity is Sell and assigned short-term B2 & long-term Ba2 forecasted stock rating.
Q: What is the consensus rating of PCTY stock?
A: The consensus rating for PCTY is Sell.
Q: What is the prediction period for PCTY stock?
A: The prediction period for PCTY is (n+3 month)

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