Modelling A.I. in Economics

What are buy sell or hold recommendations? (AZPN Stock Forecast)

This paper proposes genetic algorithms (GAs) approach to feature discretization and the determination of connection weights for artificial neural networks (ANNs) to predict the stock price index. Previous research proposed many hybrid models of ANN and GA for the method of training the network, feature subset selection, and topology optimization. We evaluate Aspen Technology prediction models with Reinforcement Machine Learning (ML) and Wilcoxon Sign-Rank Test1,2,3,4 and conclude that the AZPN stock is predictable in the short/long term. According to price forecasts for (n+6 month) period: The dominant strategy among neural network is to Sell AZPN stock.


Keywords: AZPN, Aspen Technology, 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. Prediction Modeling
  3. What are buy sell or hold recommendations?

AZPN Target Price Prediction Modeling Methodology

Stock market also called as equity market is the aggregation of the sellers and buyers. It is concerned with the domain where the shares of various public listed companies are traded. For predicting the growth of economy, stock market acts as an index. Due to the nonlinear nature, the prediction of the stock market becomes a difficult task. But the application of various machine learning techniques has been becoming a powerful source for the prediction. We consider Aspen Technology Stock Decision Process with Wilcoxon Sign-Rank Test where A is the set of discrete actions of AZPN 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 Sign-Rank 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(Reinforcement Machine Learning (ML)) X S(n):→ (n+6 month) i = 1 n s i

n:Time series to forecast

p:Price signals of AZPN 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?

AZPN Stock Forecast (Buy or Sell) for (n+6 month)


Sample Set: Neural Network
Stock/Index: AZPN Aspen Technology
Time series to forecast n: 05 Nov 2022 for (n+6 month)

According to price forecasts for (n+6 month) period: The dominant strategy among neural network is to Sell AZPN 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 Aspen Technology

  1. A contractually specified inflation risk component of the cash flows of a recognised inflation-linked bond (assuming that there is no requirement to account for an embedded derivative separately) is separately identifiable and reliably measurable, as long as other cash flows of the instrument are not affected by the inflation risk component.
  2. An entity is not required to incorporate forecasts of future conditions over the entire expected life of a financial instrument. The degree of judgement that is required to estimate expected credit losses depends on the availability of detailed information. As the forecast horizon increases, the availability of detailed information decreases and the degree of judgement required to estimate expected credit losses increases. The estimate of expected credit losses does not require a detailed estimate for periods that are far in the future—for such periods, an entity may extrapolate projections from available, detailed information.
  3. Adjusting the hedge ratio by decreasing the volume of the hedging instrument does not affect how the changes in the value of the hedged item are measured. The measurement of the changes in the fair value of the hedging instrument related to the volume that continues to be designated also remains unaffected. However, from the date of rebalancing, the volume by which the hedging instrument was decreased is no longer part of the hedging relationship. For example, if an entity originally hedged the price risk of a commodity using a derivative volume of 100 tonnes as the hedging instrument and reduces that volume by 10 tonnes on rebalancing, a nominal amount of 90 tonnes of the hedging instrument volume would remain (see paragraph B6.5.16 for the consequences for the derivative volume (ie the 10 tonnes) that is no longer a part of the hedging relationship).
  4. For the avoidance of doubt, the effects of replacing the original counterparty with a clearing counterparty and making the associated changes as described in paragraph 6.5.6 shall be reflected in the measurement of the hedging instrument and therefore in the assessment of hedge effectiveness and the measurement of hedge effectiveness

*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

Aspen Technology assigned short-term Ba3 & long-term Baa2 forecasted stock rating. We evaluate the prediction models Reinforcement Machine Learning (ML) with Wilcoxon Sign-Rank Test1,2,3,4 and conclude that the AZPN stock is predictable in the short/long term. According to price forecasts for (n+6 month) period: The dominant strategy among neural network is to Sell AZPN stock.

Financial State Forecast for AZPN Aspen Technology Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*Ba3Baa2
Operational Risk 8890
Market Risk6084
Technical Analysis4971
Fundamental Analysis7860
Risk Unsystematic5379

Prediction Confidence Score

Trust metric by Neural Network: 77 out of 100 with 552 signals.

References

  1. Imai K, Ratkovic M. 2013. Estimating treatment effect heterogeneity in randomized program evaluation. Ann. Appl. Stat. 7:443–70
  2. Breiman L. 2001b. Statistical modeling: the two cultures (with comments and a rejoinder by the author). Stat. Sci. 16:199–231
  3. 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.
  4. Tibshirani R, Hastie T. 1987. Local likelihood estimation. J. Am. Stat. Assoc. 82:559–67
  5. M. J. Hausknecht and P. Stone. Deep recurrent Q-learning for partially observable MDPs. CoRR, abs/1507.06527, 2015
  6. Bottou L. 2012. Stochastic gradient descent tricks. In Neural Networks: Tricks of the Trade, ed. G Montavon, G Orr, K-R Müller, pp. 421–36. Berlin: Springer
  7. Bengio Y, Schwenk H, Senécal JS, Morin F, Gauvain JL. 2006. Neural probabilistic language models. In Innovations in Machine Learning: Theory and Applications, ed. DE Holmes, pp. 137–86. Berlin: Springer
Frequently Asked QuestionsQ: What is the prediction methodology for AZPN stock?
A: AZPN stock prediction methodology: We evaluate the prediction models Reinforcement Machine Learning (ML) and Wilcoxon Sign-Rank Test
Q: Is AZPN stock a buy or sell?
A: The dominant strategy among neural network is to Sell AZPN Stock.
Q: Is Aspen Technology stock a good investment?
A: The consensus rating for Aspen Technology is Sell and assigned short-term Ba3 & long-term Baa2 forecasted stock rating.
Q: What is the consensus rating of AZPN stock?
A: The consensus rating for AZPN is Sell.
Q: What is the prediction period for AZPN stock?
A: The prediction period for AZPN is (n+6 month)

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