Modelling A.I. in Economics

Trading Signals (TXT Stock Forecast) (Forecast)

Neural networks, as an intelligent data mining method, have been used in many different challenging pattern recognition problems such as stock market prediction. However, there is no formal method to determine the optimal neural network for prediction purpose in the literature. In this paper, two kinds of neural networks, a feed forward multi layer Perceptron (MLP) and an Elman recurrent network, are used to predict a company's stock value based on its stock share value history. We evaluate Textron prediction models with Modular Neural Network (News Feed Sentiment Analysis) and Linear Regression1,2,3,4 and conclude that the TXT 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 TXT stock.


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

Key Points

  1. How do you decide buy or sell a stock?
  2. Game Theory
  3. What is neural prediction?

TXT Target Price Prediction Modeling Methodology

This paper aims to develop an innovative neural network approach to achieve better stock market predictions. Data were obtained from the live stock market for real-time and off-line analysis and results of visualizations and analytics to demonstrate Internet of Multimedia of Things for stock analysis. To study the influence of market characteristics on stock prices, traditional neural network algorithms may incorrectly predict the stock market, since the initial weight of the random selection problem can be easily prone to incorrect predictions. We consider Textron Stock Decision Process with Linear Regression where A is the set of discrete actions of TXT 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(Linear 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 (News Feed Sentiment Analysis)) X S(n):→ (n+3 month) R = r 1 r 2 r 3

n:Time series to forecast

p:Price signals of TXT 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?

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


Sample Set: Neural Network
Stock/Index: TXT Textron
Time series to forecast n: 09 Nov 2022 for (n+3 month)

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

  1. The accounting for the forward element of forward contracts in accordance with paragraph 6.5.16 applies only to the extent that the forward element relates to the hedged item (aligned forward element). The forward element of a forward contract relates to the hedged item if the critical terms of the forward contract (such as the nominal amount, life and underlying) are aligned with the hedged item. Hence, if the critical terms of the forward contract and the hedged item are not fully aligned, an entity shall determine the aligned forward element, ie how much of the forward element included in the forward contract (actual forward element) relates to the hedged item (and therefore should be treated in accordance with paragraph 6.5.16). An entity determines the aligned forward element using the valuation of the forward contract that would have critical terms that perfectly match the hedged item.
  2. The risk of a default occurring on financial instruments that have comparable credit risk is higher the longer the expected life of the instrument; for example, the risk of a default occurring on an AAA-rated bond with an expected life of 10 years is higher than that on an AAA-rated bond with an expected life of five years.
  3. An entity is not required to restate prior periods to reflect the application of these amendments. The entity may restate prior periods only if it is possible to do so without the use of hindsight. If an entity restates prior periods, the restated financial statements must reflect all the requirements in this Standard for the affected financial instruments. 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. Fluctuation around a constant hedge ratio (and hence the related hedge ineffectiveness) cannot be reduced by adjusting the hedge ratio in response to each particular outcome. Hence, in such circumstances, the change in the extent of offset is a matter of measuring and recognising hedge ineffectiveness but does not require rebalancing.

*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

Textron assigned short-term B2 & long-term B1 forecasted stock rating. We evaluate the prediction models Modular Neural Network (News Feed Sentiment Analysis) with Linear Regression1,2,3,4 and conclude that the TXT 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 TXT stock.

Financial State Forecast for TXT Textron Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B2B1
Operational Risk 4733
Market Risk6568
Technical Analysis4484
Fundamental Analysis5977
Risk Unsystematic4736

Prediction Confidence Score

Trust metric by Neural Network: 85 out of 100 with 470 signals.

References

  1. S. Bhatnagar, R. Sutton, M. Ghavamzadeh, and M. Lee. Natural actor-critic algorithms. Automatica, 45(11): 2471–2482, 2009
  2. Alpaydin E. 2009. Introduction to Machine Learning. Cambridge, MA: MIT Press
  3. Bell RM, Koren Y. 2007. Lessons from the Netflix prize challenge. ACM SIGKDD Explor. Newsl. 9:75–79
  4. Abadie A, Diamond A, Hainmueller J. 2010. Synthetic control methods for comparative case studies: estimat- ing the effect of California's tobacco control program. J. Am. Stat. Assoc. 105:493–505
  5. Keane MP. 2013. Panel data discrete choice models of consumer demand. In The Oxford Handbook of Panel Data, ed. BH Baltagi, pp. 54–102. Oxford, UK: Oxford Univ. Press
  6. Matzkin RL. 1994. Restrictions of economic theory in nonparametric methods. In Handbook of Econometrics, Vol. 4, ed. R Engle, D McFadden, pp. 2523–58. Amsterdam: Elsevier
  7. Mnih A, Kavukcuoglu K. 2013. Learning word embeddings efficiently with noise-contrastive estimation. In Advances in Neural Information Processing Systems, Vol. 26, ed. Z Ghahramani, M Welling, C Cortes, ND Lawrence, KQ Weinberger, pp. 2265–73. San Diego, CA: Neural Inf. Process. Syst. Found.
Frequently Asked QuestionsQ: What is the prediction methodology for TXT stock?
A: TXT stock prediction methodology: We evaluate the prediction models Modular Neural Network (News Feed Sentiment Analysis) and Linear Regression
Q: Is TXT stock a buy or sell?
A: The dominant strategy among neural network is to Hold TXT Stock.
Q: Is Textron stock a good investment?
A: The consensus rating for Textron is Hold and assigned short-term B2 & long-term B1 forecasted stock rating.
Q: What is the consensus rating of TXT stock?
A: The consensus rating for TXT is Hold.
Q: What is the prediction period for TXT stock?
A: The prediction period for TXT is (n+3 month)

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