Modelling A.I. in Economics

What are buy sell or hold recommendations? (LON:BRGE Stock Forecast) (Forecast)

Fuzzy rough theory can describe real-world situations in a mathematically effective and interpretable way, while evolutionary neural networks can be utilized to solve complex problems. Combining them with these complementary capabilities may lead to evolutionary fuzzy rough neural network with the interpretability and prediction capability. In this article, we propose modifications to the existing models of fuzzy rough neural network and then develop a powerful evolutionary framework for fuzzy rough neural networks by inheriting the merits of both the aforementioned systems. We evaluate BLACKROCK GREATER EUROPE INVESTMENT TRUST PLC prediction models with Modular Neural Network (Financial Sentiment Analysis) and Independent T-Test1,2,3,4 and conclude that the LON:BRGE 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 Hold LON:BRGE stock.


Keywords: LON:BRGE, BLACKROCK GREATER EUROPE INVESTMENT TRUST PLC, stock forecast, machine learning based prediction, risk rating, buy-sell behaviour, stock analysis, target price analysis, options and futures.

Key Points

  1. Game Theory
  2. Market Risk
  3. Is it better to buy and sell or hold?

LON:BRGE Target Price Prediction Modeling Methodology

Efficient Market Hypothesis (EMH) is the cornerstone of the modern financial theory and it states that it is impossible to predict the price of any stock using any trend, fundamental or technical analysis. Stock trading is one of the most important activities in the world of finance. Stock price prediction has been an age-old problem and many researchers from academia and business have tried to solve it using many techniques ranging from basic statistics to machine learning using relevant information such as news sentiment and historical prices. We consider BLACKROCK GREATER EUROPE INVESTMENT TRUST PLC Stock Decision Process with Independent T-Test where A is the set of discrete actions of LON:BRGE 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(Independent T-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 (Financial Sentiment Analysis)) X S(n):→ (n+4 weeks) i = 1 n r i

n:Time series to forecast

p:Price signals of LON:BRGE 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?

LON:BRGE Stock Forecast (Buy or Sell) for (n+4 weeks)


Sample Set: Neural Network
Stock/Index: LON:BRGE BLACKROCK GREATER EUROPE INVESTMENT TRUST PLC
Time series to forecast n: 07 Nov 2022 for (n+4 weeks)

According to price forecasts for (n+4 weeks) period: The dominant strategy among neural network is to Hold LON:BRGE 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 BLACKROCK GREATER EUROPE INVESTMENT TRUST PLC

  1. If a financial asset contains a contractual term that could change the timing or amount of contractual cash flows (for example, if the asset can be prepaid before maturity or its term can be extended), the entity must determine whether the contractual cash flows that could arise over the life of the instrument due to that contractual term are solely payments of principal and interest on the principal amount outstanding. To make this determination, the entity must assess the contractual cash flows that could arise both before, and after, the change in contractual cash flows. The entity may also need to assess the nature of any contingent event (ie the trigger) that would change the timing or amount of the contractual cash flows. While the nature of the contingent event in itself is not a determinative factor in assessing whether the contractual cash flows are solely payments of principal and interest, it may be an indicator. For example, compare a financial instrument with an interest rate that is reset to a higher rate if the debtor misses a particular number of payments to a financial instrument with an interest rate that is reset to a higher rate if a specified equity index reaches a particular level. It is more likely in the former case that the contractual cash flows over the life of the instrument will be solely payments of principal and interest on the principal amount outstanding because of the relationship between missed payments and an increase in credit risk. (See also paragraph B4.1.18.)
  2. The business model may be to hold assets to collect contractual cash flows even if the entity sells financial assets when there is an increase in the assets' credit risk. To determine whether there has been an increase in the assets' credit risk, the entity considers reasonable and supportable information, including forward looking information. Irrespective of their frequency and value, sales due to an increase in the assets' credit risk are not inconsistent with a business model whose objective is to hold financial assets to collect contractual cash flows because the credit quality of financial assets is relevant to the entity's ability to collect contractual cash flows. Credit risk management activities that are aimed at minimising potential credit losses due to credit deterioration are integral to such a business model. Selling a financial asset because it no longer meets the credit criteria specified in the entity's documented investment policy is an example of a sale that has occurred due to an increase in credit risk. However, in the absence of such a policy, the entity may demonstrate in other ways that the sale occurred due to an increase in credit risk.
  3. IFRS 15, issued in May 2014, amended paragraphs 3.1.1, 4.2.1, 5.1.1, 5.2.1, 5.7.6, B3.2.13, B5.7.1, C5 and C42 and deleted paragraph C16 and its related heading. Paragraphs 5.1.3 and 5.7.1A, and a definition to Appendix A, were added. An entity shall apply those amendments when it applies IFRS 15.
  4. An entity can also designate only changes in the cash flows or fair value of a hedged item above or below a specified price or other variable (a 'one-sided risk'). The intrinsic value of a purchased option hedging instrument (assuming that it has the same principal terms as the designated risk), but not its time value, reflects a one-sided risk in a hedged item. For example, an entity can designate the variability of future cash flow outcomes resulting from a price increase of a forecast commodity purchase. In such a situation, the entity designates only cash flow losses that result from an increase in the price above the specified level. The hedged risk does not include the time value of a purchased option, because the time value is not a component of the forecast transaction that affects profit or 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

BLACKROCK GREATER EUROPE INVESTMENT TRUST PLC assigned short-term Baa2 & long-term Ba3 forecasted stock rating. We evaluate the prediction models Modular Neural Network (Financial Sentiment Analysis) with Independent T-Test1,2,3,4 and conclude that the LON:BRGE 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 Hold LON:BRGE stock.

Financial State Forecast for LON:BRGE BLACKROCK GREATER EUROPE INVESTMENT TRUST PLC Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*Baa2Ba3
Operational Risk 9087
Market Risk8674
Technical Analysis7848
Fundamental Analysis6847
Risk Unsystematic4575

Prediction Confidence Score

Trust metric by Neural Network: 89 out of 100 with 755 signals.

References

  1. R. Rockafellar and S. Uryasev. Conditional value-at-risk for general loss distributions. Journal of Banking and Finance, 26(7):1443 – 1471, 2002
  2. Farrell MH, Liang T, Misra S. 2018. Deep neural networks for estimation and inference: application to causal effects and other semiparametric estimands. arXiv:1809.09953 [econ.EM]
  3. F. A. Oliehoek and C. Amato. A Concise Introduction to Decentralized POMDPs. SpringerBriefs in Intelligent Systems. Springer, 2016
  4. L. Prashanth and M. Ghavamzadeh. Actor-critic algorithms for risk-sensitive MDPs. In Proceedings of Advances in Neural Information Processing Systems 26, pages 252–260, 2013.
  5. Hastie T, Tibshirani R, Wainwright M. 2015. Statistical Learning with Sparsity: The Lasso and Generalizations. New York: CRC Press
  6. Bai J, Ng S. 2002. Determining the number of factors in approximate factor models. Econometrica 70:191–221
  7. Blei DM, Lafferty JD. 2009. Topic models. In Text Mining: Classification, Clustering, and Applications, ed. A Srivastava, M Sahami, pp. 101–24. Boca Raton, FL: CRC Press
Frequently Asked QuestionsQ: What is the prediction methodology for LON:BRGE stock?
A: LON:BRGE stock prediction methodology: We evaluate the prediction models Modular Neural Network (Financial Sentiment Analysis) and Independent T-Test
Q: Is LON:BRGE stock a buy or sell?
A: The dominant strategy among neural network is to Hold LON:BRGE Stock.
Q: Is BLACKROCK GREATER EUROPE INVESTMENT TRUST PLC stock a good investment?
A: The consensus rating for BLACKROCK GREATER EUROPE INVESTMENT TRUST PLC is Hold and assigned short-term Baa2 & long-term Ba3 forecasted stock rating.
Q: What is the consensus rating of LON:BRGE stock?
A: The consensus rating for LON:BRGE is Hold.
Q: What is the prediction period for LON:BRGE stock?
A: The prediction period for LON:BRGE is (n+4 weeks)

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