Thoughtworks Research Report

## Summary

In recent years there has been a significant growth of interest in the incorporation of historical series of variables related to stock prediction into mathematical models or computational algorithms in order to generate predictions or indications about expected price movements. We evaluate Thoughtworks prediction models with Modular Neural Network (Financial Sentiment Analysis) and Pearson Correlation1,2,3,4 and conclude that the TWKS 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 TWKS stock.

## Key Points

1. What is Markov decision process in reinforcement learning?
2. What is neural prediction?
3. Can machine learning predict?

## TWKS Target Price Prediction Modeling Methodology

We consider Thoughtworks Stock Decision Process with Modular Neural Network (Financial Sentiment Analysis) where A is the set of discrete actions of TWKS 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(Pearson Correlation)5,6,7= $\begin{array}{cccc}{p}_{a1}& {p}_{a2}& \dots & {p}_{1n}\\ & ⋮\\ {p}_{j1}& {p}_{j2}& \dots & {p}_{jn}\\ & ⋮\\ {p}_{k1}& {p}_{k2}& \dots & {p}_{kn}\\ & ⋮\\ {p}_{n1}& {p}_{n2}& \dots & {p}_{nn}\end{array}$ X R(Modular Neural Network (Financial Sentiment Analysis)) X S(n):→ (n+6 month) $R=\left(\begin{array}{ccc}1& 0& 0\\ 0& 1& 0\\ 0& 0& 1\end{array}\right)$

n:Time series to forecast

p:Price signals of TWKS stock

j:Nash equilibria (Neural Network)

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?

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

Sample Set: Neural Network
Stock/Index: TWKS Thoughtworks
Time series to forecast n: 21 Nov 2022 for (n+6 month)

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

1. In some cases, the qualitative and non-statistical quantitative information available may be sufficient to determine that a financial instrument has met the criterion for the recognition of a loss allowance at an amount equal to lifetime expected credit losses. That is, the information does not need to flow through a statistical model or credit ratings process in order to determine whether there has been a significant increase in the credit risk of the financial instrument. In other cases, an entity may need to consider other information, including information from its statistical models or credit ratings processes.
2. An embedded prepayment option in an interest-only or principal-only strip is closely related to the host contract provided the host contract (i) initially resulted from separating the right to receive contractual cash flows of a financial instrument that, in and of itself, did not contain an embedded derivative, and (ii) does not contain any terms not present in the original host debt contract.
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. When identifying what risk components qualify for designation as a hedged item, an entity assesses such risk components within the context of the particular market structure to which the risk or risks relate and in which the hedging activity takes place. Such a determination requires an evaluation of the relevant facts and circumstances, which differ by risk and market.

*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

Thoughtworks assigned short-term B2 & long-term B1 forecasted stock rating. We evaluate the prediction models Modular Neural Network (Financial Sentiment Analysis) with Pearson Correlation1,2,3,4 and conclude that the TWKS 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 TWKS stock.

### Financial State Forecast for TWKS Thoughtworks Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B2B1
Operational Risk 4166
Market Risk8557
Technical Analysis3573
Fundamental Analysis6444
Risk Unsystematic3541

### Prediction Confidence Score

Trust metric by Neural Network: 81 out of 100 with 745 signals.

## References

1. Canova, F. B. E. Hansen (1995), "Are seasonal patterns constant over time? A test for seasonal stability," Journal of Business and Economic Statistics, 13, 237–252.
2. Holland PW. 1986. Statistics and causal inference. J. Am. Stat. Assoc. 81:945–60
3. G. Shani, R. Brafman, and D. Heckerman. An MDP-based recommender system. In Proceedings of the Eigh- teenth conference on Uncertainty in artificial intelligence, pages 453–460. Morgan Kaufmann Publishers Inc., 2002
4. Hoerl AE, Kennard RW. 1970. Ridge regression: biased estimation for nonorthogonal problems. Technometrics 12:55–67
5. Greene WH. 2000. Econometric Analysis. Upper Saddle River, N J: Prentice Hall. 4th ed.
6. J. Z. Leibo, V. Zambaldi, M. Lanctot, J. Marecki, and T. Graepel. Multi-agent Reinforcement Learning in Sequential Social Dilemmas. In Proceedings of the 16th International Conference on Autonomous Agents and Multiagent Systems (AAMAS 2017), Sao Paulo, Brazil, 2017
7. Mikolov T, Sutskever I, Chen K, Corrado GS, Dean J. 2013b. Distributed representations of words and phrases and their compositionality. In Advances in Neural Information Processing Systems, Vol. 26, ed. Z Ghahramani, M Welling, C Cortes, ND Lawrence, KQ Weinberger, pp. 3111–19. San Diego, CA: Neural Inf. Process. Syst. Found.
Frequently Asked QuestionsQ: What is the prediction methodology for TWKS stock?
A: TWKS stock prediction methodology: We evaluate the prediction models Modular Neural Network (Financial Sentiment Analysis) and Pearson Correlation
Q: Is TWKS stock a buy or sell?
A: The dominant strategy among neural network is to Sell TWKS Stock.
Q: Is Thoughtworks stock a good investment?
A: The consensus rating for Thoughtworks is Sell and assigned short-term B2 & long-term B1 forecasted stock rating.
Q: What is the consensus rating of TWKS stock?
A: The consensus rating for TWKS is Sell.
Q: What is the prediction period for TWKS stock?
A: The prediction period for TWKS is (n+6 month)