Modelling A.I. in Economics

Should You Buy NSE ITC Right Now? (Stock Forecast)

Security indices are the main tools for evaluation of the status of financial markets. Moreover, a main part of the economy of any country is constituted of investment in stock markets. Therefore, investors could maximize the return of investment if it becomes possible to predict the future trend of stock market with appropriate methods. The nonlinearity and nonstationarity of financial series make their prediction complicated. This study seeks to evaluate the prediction power of machine-learning models in a stock market. We evaluate ITC Limited prediction models with Modular Neural Network (DNN Layer) and Wilcoxon Rank-Sum Test1,2,3,4 and conclude that the NSE ITC 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 Hold NSE ITC stock.

Key Points

  1. How do you pick a stock?
  2. Decision Making
  3. What is prediction in deep learning?

NSE ITC Target Price Prediction Modeling Methodology

Recently, numerous investigations for stock price prediction and portfolio management using machine learning have been trying to develop efficient mechanical trading systems. But these systems have a limitation in that they are mainly based on the supervised learning which is not so adequate for learning problems with long-term goals and delayed rewards. This paper proposes a method of applying reinforcement learning, suitable for modeling and learning various kinds of interactions in real situations, to the problem of stock price prediction. We consider ITC Limited Stock Decision Process with Wilcoxon Rank-Sum Test where A is the set of discrete actions of NSE ITC 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(Wilcoxon Rank-Sum Test)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(Modular Neural Network (DNN Layer)) X S(n):→ (n+3 month) e x rx

n:Time series to forecast

p:Price signals of NSE ITC 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?

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

Sample Set: Neural Network
Stock/Index: NSE ITC ITC Limited
Time series to forecast n: 17 Nov 2022 for (n+3 month)

According to price forecasts for (n+3 month) period: The dominant strategy among neural network is to Hold NSE ITC 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 ITC Limited

  1. For the purpose of applying paragraphs B4.1.11(b) and B4.1.12(b), irrespective of the event or circumstance that causes the early termination of the contract, a party may pay or receive reasonable compensation for that early termination. For example, a party may pay or receive reasonable compensation when it chooses to terminate the contract early (or otherwise causes the early termination to occur).
  2. For lifetime expected credit losses, an entity shall estimate the risk of a default occurring on the financial instrument during its expected life. 12-month expected credit losses are a portion of the lifetime expected credit losses and represent the lifetime cash shortfalls that will result if a default occurs in the 12 months after the reporting date (or a shorter period if the expected life of a financial instrument is less than 12 months), weighted by the probability of that default occurring. Thus, 12-month expected credit losses are neither the lifetime expected credit losses that an entity will incur on financial instruments that it predicts will default in the next 12 months nor the cash shortfalls that are predicted over the next 12 months.
  3. Conversely, if the critical terms of the hedging instrument and the hedged item are not closely aligned, there is an increased level of uncertainty about the extent of offset. Consequently, the hedge effectiveness during the term of the hedging relationship is more difficult to predict. In such a situation it might only be possible for an entity to conclude on the basis of a quantitative assessment that an economic relationship exists between the hedged item and the hedging instrument (see paragraphs B6.4.4–B6.4.6). In some situations a quantitative assessment might also be needed to assess whether the hedge ratio used for designating the hedging relationship meets the hedge effectiveness requirements (see paragraphs B6.4.9–B6.4.11). An entity can use the same or different methods for those two different purposes.
  4. 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. 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.

*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

ITC Limited assigned short-term B1 & long-term Ba3 forecasted stock rating. We evaluate the prediction models Modular Neural Network (DNN Layer) with Wilcoxon Rank-Sum Test1,2,3,4 and conclude that the NSE ITC 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 Hold NSE ITC stock.

Financial State Forecast for NSE ITC ITC Limited Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B1Ba3
Operational Risk 5786
Market Risk7987
Technical Analysis4673
Fundamental Analysis7932
Risk Unsystematic5141

Prediction Confidence Score

Trust metric by Neural Network: 93 out of 100 with 684 signals.

References

  1. Chamberlain G. 2000. Econometrics and decision theory. J. Econom. 95:255–83
  2. Sutton RS, Barto AG. 1998. Reinforcement Learning: An Introduction. Cambridge, MA: MIT Press
  3. Breiman L. 1996. Bagging predictors. Mach. Learn. 24:123–40
  4. Breiman L. 2001a. Random forests. Mach. Learn. 45:5–32
  5. M. Puterman. Markov Decision Processes: Discrete Stochastic Dynamic Programming. Wiley, New York, 1994.
  6. Holland PW. 1986. Statistics and causal inference. J. Am. Stat. Assoc. 81:945–60
  7. Zubizarreta JR. 2015. Stable weights that balance covariates for estimation with incomplete outcome data. J. Am. Stat. Assoc. 110:910–22
Frequently Asked QuestionsQ: What is the prediction methodology for NSE ITC stock?
A: NSE ITC stock prediction methodology: We evaluate the prediction models Modular Neural Network (DNN Layer) and Wilcoxon Rank-Sum Test
Q: Is NSE ITC stock a buy or sell?
A: The dominant strategy among neural network is to Hold NSE ITC Stock.
Q: Is ITC Limited stock a good investment?
A: The consensus rating for ITC Limited is Hold and assigned short-term B1 & long-term Ba3 forecasted stock rating.
Q: What is the consensus rating of NSE ITC stock?
A: The consensus rating for NSE ITC is Hold.
Q: What is the prediction period for NSE ITC stock?
A: The prediction period for NSE ITC is (n+3 month)



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