*AC Investment Research empowers individual investors to make better trading decisions by providing machine learning based objective stock market analysis and forecast.

Should You Buy, Sell, or Hold? (Dow Jones Shanghai Index 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 Dow Jones Shanghai Index prediction models with Modular Neural Network (DNN Layer) and ElasticNet Regression1,2,3,4 and conclude that the Dow Jones Shanghai Index stock is predictable in the short/long term. According to price forecasts for (n+4 weeks) period: The dominant strategy among neural network is to Buy Dow Jones Shanghai Index stock.


Keywords: Dow Jones Shanghai Index, Dow Jones Shanghai Index, stock forecast, machine learning based prediction, risk rating, buy-sell behaviour, stock analysis, target price analysis, options and futures.

Key Points

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

Dow Jones Shanghai Index Target Price Prediction Modeling Methodology

In this paper, we propose a robust and novel hybrid model for prediction of stock returns. The proposed model is constituted of two linear models: autoregressive moving average model, exponential smoothing model and a non-linear model: recurrent neural network. Training data for recurrent neural network is generated by a new regression model. Recurrent neural network produces satisfactory predictions as compared to linear models. With the goal to further improve the accuracy of predictions, the proposed hybrid prediction model merges predictions obtained from these three prediction based models. We consider Dow Jones Shanghai Index Stock Decision Process with ElasticNet Regression where A is the set of discrete actions of Dow Jones Shanghai 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(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(Modular Neural Network (DNN Layer)) X S(n):→ (n+4 weeks) i = 1 n a i

n:Time series to forecast

p:Price signals of Dow Jones Shanghai Index 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?

Dow Jones Shanghai Index Stock Forecast (Buy or Sell) for (n+4 weeks)


Sample Set: Neural Network
Stock/Index: Dow Jones Shanghai Index Dow Jones Shanghai Index
Time series to forecast n: 09 Nov 2022 for (n+4 weeks)

According to price forecasts for (n+4 weeks) period: The dominant strategy among neural network is to Buy Dow Jones Shanghai 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 Dow Jones Shanghai Index

  1. If an entity measures a hybrid contract at fair value in accordance with paragraphs 4.1.2A, 4.1.4 or 4.1.5 but the fair value of the hybrid contract had not been measured in comparative reporting periods, the fair value of the hybrid contract in the comparative reporting periods shall be the sum of the fair values of the components (ie the non-derivative host and the embedded derivative) at the end of each comparative reporting period if the entity restates prior periods (see paragraph 7.2.15).
  2. When assessing a modified time value of money element, an entity must consider factors that could affect future contractual cash flows. For example, if an entity is assessing a bond with a five-year term and the variable interest rate is reset every six months to a five-year rate, the entity cannot conclude that the contractual cash flows are solely payments of principal and interest on the principal amount outstanding simply because the interest rate curve at the time of the assessment is such that the difference between a five-year interest rate and a six-month interest rate is not significant. Instead, the entity must also consider whether the relationship between the five-year interest rate and the six-month interest rate could change over the life of the instrument such that the contractual (undiscounted) cash flows over the life of the instrument could be significantly different from the (undiscounted) benchmark cash flows. However, an entity must consider only reasonably possible scenarios instead of every possible scenario. If an entity concludes that the contractual (undiscounted) cash flows could be significantly different from the (undiscounted) benchmark cash flows, the financial asset does not meet the condition in paragraphs 4.1.2(b) and 4.1.2A(b) and therefore cannot be measured at amortised cost or fair value through other comprehensive income.
  3. 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).
  4. The purpose of estimating expected credit losses is neither to estimate a worstcase scenario nor to estimate the best-case scenario. Instead, an estimate of expected credit losses shall always reflect the possibility that a credit loss occurs and the possibility that no credit loss occurs even if the most likely outcome is no credit loss.

*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

Dow Jones Shanghai Index assigned short-term B2 & long-term Ba3 forecasted stock rating. We evaluate the prediction models Modular Neural Network (DNN Layer) with ElasticNet Regression1,2,3,4 and conclude that the Dow Jones Shanghai Index stock is predictable in the short/long term. According to price forecasts for (n+4 weeks) period: The dominant strategy among neural network is to Buy Dow Jones Shanghai Index stock.

Financial State Forecast for Dow Jones Shanghai Index Dow Jones Shanghai Index Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B2Ba3
Operational Risk 5153
Market Risk3756
Technical Analysis5946
Fundamental Analysis4667
Risk Unsystematic8988

Prediction Confidence Score

Trust metric by Neural Network: 89 out of 100 with 720 signals.

References

  1. S. Bhatnagar and K. Lakshmanan. An online actor-critic algorithm with function approximation for con- strained Markov decision processes. Journal of Optimization Theory and Applications, 153(3):688–708, 2012.
  2. K. Boda, J. Filar, Y. Lin, and L. Spanjers. Stochastic target hitting time and the problem of early retirement. Automatic Control, IEEE Transactions on, 49(3):409–419, 2004
  3. J. Spall. Multivariate stochastic approximation using a simultaneous perturbation gradient approximation. IEEE Transactions on Automatic Control, 37(3):332–341, 1992.
  4. T. Shardlow and A. Stuart. A perturbation theory for ergodic Markov chains and application to numerical approximations. SIAM journal on numerical analysis, 37(4):1120–1137, 2000
  5. Athey S, Wager S. 2017. Efficient policy learning. arXiv:1702.02896 [math.ST]
  6. Akgiray, V. (1989), "Conditional heteroscedasticity in time series of stock returns: Evidence and forecasts," Journal of Business, 62, 55–80.
  7. Batchelor, R. P. Dua (1993), "Survey vs ARCH measures of inflation uncertainty," Oxford Bulletin of Economics Statistics, 55, 341–353.
Frequently Asked QuestionsQ: What is the prediction methodology for Dow Jones Shanghai Index stock?
A: Dow Jones Shanghai Index stock prediction methodology: We evaluate the prediction models Modular Neural Network (DNN Layer) and ElasticNet Regression
Q: Is Dow Jones Shanghai Index stock a buy or sell?
A: The dominant strategy among neural network is to Buy Dow Jones Shanghai Index Stock.
Q: Is Dow Jones Shanghai Index stock a good investment?
A: The consensus rating for Dow Jones Shanghai Index is Buy and assigned short-term B2 & long-term Ba3 forecasted stock rating.
Q: What is the consensus rating of Dow Jones Shanghai Index stock?
A: The consensus rating for Dow Jones Shanghai Index is Buy.
Q: What is the prediction period for Dow Jones Shanghai Index stock?
A: The prediction period for Dow Jones Shanghai Index is (n+4 weeks)

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