Modelling A.I. in Economics

When to Sell and When to Hold BSE Sensex 30 Index Stock (Forecast)

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 evaluate BSE Sensex 30 Index prediction models with Supervised Machine Learning (ML) and Independent T-Test1,2,3,4 and conclude that the BSE Sensex 30 Index stock is predictable in the short/long term. According to price forecasts for (n+8 weeks) period: The dominant strategy among neural network is to Buy BSE Sensex 30 Index stock.


Keywords: BSE Sensex 30 Index, BSE Sensex 30 Index, stock forecast, machine learning based prediction, risk rating, buy-sell behaviour, stock analysis, target price analysis, options and futures.

Key Points

  1. Market Risk
  2. Market Risk
  3. How do you decide buy or sell a stock?

BSE Sensex 30 Index Target Price Prediction Modeling Methodology

Prediction of stock market movement is extremely difficult due to its high mutable nature. The rapid ups and downs occur in stock market because of impact from foreign commodities like emotional behavior of investors, political, psychological and economical factors. Continuous unsettlement in the stock market is major reason why investors sell out at the wrong time and often fail to gain the benefit. While investing in stock market investors must not forget the risk of reward rule and expose their holdings to greater risks. Although it is not possible predict stock market movement with full accuracy, losses from selling stocks at wrong time and its impacts can be reduce to greater extent using prediction of stock market movement based on analysis of historical data. We consider BSE Sensex 30 Index Stock Decision Process with Independent T-Test where A is the set of discrete actions of BSE Sensex 30 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(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(Supervised Machine Learning (ML)) X S(n):→ (n+8 weeks) e x rx

n:Time series to forecast

p:Price signals of BSE Sensex 30 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?

BSE Sensex 30 Index Stock Forecast (Buy or Sell) for (n+8 weeks)


Sample Set: Neural Network
Stock/Index: BSE Sensex 30 Index BSE Sensex 30 Index
Time series to forecast n: 04 Nov 2022 for (n+8 weeks)

According to price forecasts for (n+8 weeks) period: The dominant strategy among neural network is to Buy BSE Sensex 30 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 BSE Sensex 30 Index

  1. An entity can rebut this presumption. However, it can do so only when it has reasonable and supportable information available that demonstrates that even if contractual payments become more than 30 days past due, this does not represent a significant increase in the credit risk of a financial instrument. For example when non-payment was an administrative oversight, instead of resulting from financial difficulty of the borrower, or the entity has access to historical evidence that demonstrates that there is no correlation between significant increases in the risk of a default occurring and financial assets on which payments are more than 30 days past due, but that evidence does identify such a correlation when payments are more than 60 days past due.
  2. If the group of items does not have any offsetting risk positions (for example, a group of foreign currency expenses that affect different line items in the statement of profit or loss and other comprehensive income that are hedged for foreign currency risk) then the reclassified hedging instrument gains or losses shall be apportioned to the line items affected by the hedged items. This apportionment shall be done on a systematic and rational basis and shall not result in the grossing up of the net gains or losses arising from a single hedging instrument.
  3. For the purpose of recognising foreign exchange gains and losses under IAS 21, a financial asset measured at fair value through other comprehensive income in accordance with paragraph 4.1.2A is treated as a monetary item. Accordingly, such a financial asset is treated as an asset measured at amortised cost in the foreign currency. Exchange differences on the amortised cost are recognised in profit or loss and other changes in the carrying amount are recognised in accordance with paragraph 5.7.10.
  4. When designating risk components as hedged items, an entity considers whether the risk components are explicitly specified in a contract (contractually specified risk components) or whether they are implicit in the fair value or the cash flows of an item of which they are a part (noncontractually specified risk components). Non-contractually specified risk components can relate to items that are not a contract (for example, forecast transactions) or contracts that do not explicitly specify the component (for example, a firm commitment that includes only one single price instead of a pricing formula that references different underlyings)

*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

BSE Sensex 30 Index assigned short-term B1 & long-term Baa2 forecasted stock rating. We evaluate the prediction models Supervised Machine Learning (ML) with Independent T-Test1,2,3,4 and conclude that the BSE Sensex 30 Index stock is predictable in the short/long term. According to price forecasts for (n+8 weeks) period: The dominant strategy among neural network is to Buy BSE Sensex 30 Index stock.

Financial State Forecast for BSE Sensex 30 Index BSE Sensex 30 Index Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B1Baa2
Operational Risk 6590
Market Risk3756
Technical Analysis4979
Fundamental Analysis6658
Risk Unsystematic8185

Prediction Confidence Score

Trust metric by Neural Network: 76 out of 100 with 870 signals.

References

  1. J. Ott. A Markov decision model for a surveillance application and risk-sensitive Markov decision processes. PhD thesis, Karlsruhe Institute of Technology, 2010.
  2. 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.
  3. J. Harb and D. Precup. Investigating recurrence and eligibility traces in deep Q-networks. In Deep Reinforcement Learning Workshop, NIPS 2016, Barcelona, Spain, 2016.
  4. Tibshirani R. 1996. Regression shrinkage and selection via the lasso. J. R. Stat. Soc. B 58:267–88
  5. Ashley, R. (1983), "On the usefulness of macroeconomic forecasts as inputs to forecasting models," Journal of Forecasting, 2, 211–223.
  6. J. Peters, S. Vijayakumar, and S. Schaal. Natural actor-critic. In Proceedings of the Sixteenth European Conference on Machine Learning, pages 280–291, 2005.
  7. Vapnik V. 2013. The Nature of Statistical Learning Theory. Berlin: Springer
Frequently Asked QuestionsQ: What is the prediction methodology for BSE Sensex 30 Index stock?
A: BSE Sensex 30 Index stock prediction methodology: We evaluate the prediction models Supervised Machine Learning (ML) and Independent T-Test
Q: Is BSE Sensex 30 Index stock a buy or sell?
A: The dominant strategy among neural network is to Buy BSE Sensex 30 Index Stock.
Q: Is BSE Sensex 30 Index stock a good investment?
A: The consensus rating for BSE Sensex 30 Index is Buy and assigned short-term B1 & long-term Baa2 forecasted stock rating.
Q: What is the consensus rating of BSE Sensex 30 Index stock?
A: The consensus rating for BSE Sensex 30 Index is Buy.
Q: What is the prediction period for BSE Sensex 30 Index stock?
A: The prediction period for BSE Sensex 30 Index is (n+8 weeks)

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