Modelling A.I. in Economics

AIZ AIR NEW ZEALAND LIMITED

Outlook: AIR NEW ZEALAND LIMITED assigned short-term Ba1 & long-term Ba1 estimated rating.
Dominant Strategy : Wait until speculative trend diminishes
Time series to forecast n: 20 Dec 2022 for (n+16 weeks)
Methodology : Modular Neural Network (Market Volatility Analysis)

Abstract

This paper tries to address the problem of stock market prediction leveraging artificial intelligence (AI) strategies. The stock market prediction can be modeled based on two principal analyses called technical and fundamental. In the technical analysis approach, the regression machine learning (ML) algorithms are employed to predict the stock price trend at the end of a business day based on the historical price data. In contrast, in the fundamental analysis, the classification ML algorithms are applied to classify the public sentiment based on news and social media.(Batra, R. and Daudpota, S.M., 2018, March. Integrating StockTwits with sentiment analysis for better prediction of stock price movement. In 2018 International Conference on Computing, Mathematics and Engineering Technologies (iCoMET) (pp. 1-5). IEEE.) We evaluate AIR NEW ZEALAND LIMITED prediction models with Modular Neural Network (Market Volatility Analysis) and Stepwise Regression1,2,3,4 and conclude that the AIZ stock is predictable in the short/long term. According to price forecasts for (n+16 weeks) period, the dominant strategy among neural network is: Wait until speculative trend diminishes

Key Points

  1. What statistical methods are used to analyze data?
  2. How do you pick a stock?
  3. What are buy sell or hold recommendations?

AIZ Target Price Prediction Modeling Methodology

We consider AIR NEW ZEALAND LIMITED Decision Process with Modular Neural Network (Market Volatility Analysis) where A is the set of discrete actions of AIZ 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(Stepwise 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 (Market Volatility Analysis)) X S(n):→ (n+16 weeks) i = 1 n r i

n:Time series to forecast

p:Price signals of AIZ 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?

AIZ Stock Forecast (Buy or Sell) for (n+16 weeks)

Sample Set: Neural Network
Stock/Index: AIZ AIR NEW ZEALAND LIMITED
Time series to forecast n: 20 Dec 2022 for (n+16 weeks)

According to price forecasts for (n+16 weeks) period, the dominant strategy among neural network is: Wait until speculative trend diminishes

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 (Grey to Black): *Technical Analysis%

IFRS Reconciliation Adjustments for AIR NEW ZEALAND LIMITED

  1. When an entity first applies this Standard, it may choose as its accounting policy to continue to apply the hedge accounting requirements of IAS 39 instead of the requirements in Chapter 6 of this Standard. An entity shall apply that policy to all of its hedging relationships. An entity that chooses that policy shall also apply IFRIC 16 Hedges of a Net Investment in a Foreign Operation without the amendments that conform that Interpretation to the requirements in Chapter 6 of this Standard.
  2. Paragraph 5.7.5 permits an entity to make an irrevocable election to present in other comprehensive income subsequent changes in the fair value of particular investments in equity instruments. Such an investment is not a monetary item. Accordingly, the gain or loss that is presented in other comprehensive income in accordance with paragraph 5.7.5 includes any related foreign exchange component.
  3. When a group of items that constitute a net position is designated as a hedged item, an entity shall designate the overall group of items that includes the items that can make up the net position. An entity is not permitted to designate a non-specific abstract amount of a net position. For example, an entity has a group of firm sale commitments in nine months' time for FC100 and a group of firm purchase commitments in 18 months' time for FC120. The entity cannot designate an abstract amount of a net position up to FC20. Instead, it must designate a gross amount of purchases and a gross amount of sales that together give rise to the hedged net position. An entity shall designate gross positions that give rise to the net position so that the entity is able to comply with the requirements for the accounting for qualifying hedging relationships.
  4. If a call option right retained by an entity prevents a transferred asset from being derecognised and the entity measures the transferred asset at fair value, the asset continues to be measured at its fair value. The associated liability is measured at (i) the option exercise price less the time value of the option if the option is in or at the money, or (ii) the fair value of the transferred asset less the time value of the option if the option is out of the money. The adjustment to the measurement of the associated liability ensures that the net carrying amount of the asset and the associated liability is the fair value of the call option right. For example, if the fair value of the underlying asset is CU80, the option exercise price is CU95 and the time value of the option is CU5, the carrying amount of the associated liability is CU75 (CU80 – CU5) and the carrying amount of the transferred asset is CU80 (ie its fair value)

*International Financial Reporting Standards (IFRS) adjustment process involves reviewing the company's financial statements and identifying any differences between the company's current accounting practices and the requirements of the IFRS. If there are any such differences, neural network makes adjustments to financial statements to bring them into compliance with the IFRS.

Conclusions

AIR NEW ZEALAND LIMITED assigned short-term Ba1 & long-term Ba1 estimated rating. We evaluate the prediction models Modular Neural Network (Market Volatility Analysis) with Stepwise Regression1,2,3,4 and conclude that the AIZ stock is predictable in the short/long term. According to price forecasts for (n+16 weeks) period, the dominant strategy among neural network is: Wait until speculative trend diminishes

AIZ AIR NEW ZEALAND LIMITED Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*Ba1Ba1
Income StatementBaa2C
Balance SheetCBaa2
Leverage RatiosBaa2B3
Cash FlowCCaa2
Rates of Return and ProfitabilityBaa2Ba3

*Financial analysis is the process of evaluating a company's financial performance and position by neural network. It involves reviewing the company's financial statements, including the balance sheet, income statement, and cash flow statement, as well as other financial reports and documents.
How does neural network examine financial reports and understand financial state of the company?

Prediction Confidence Score

Trust metric by Neural Network: 83 out of 100 with 870 signals.

References

  1. G. Konidaris, S. Osentoski, and P. Thomas. Value function approximation in reinforcement learning using the Fourier basis. In AAAI, 2011
  2. S. Proper and K. Tumer. Modeling difference rewards for multiagent learning (extended abstract). In Proceedings of the Eleventh International Joint Conference on Autonomous Agents and Multiagent Systems, Valencia, Spain, June 2012
  3. Abadir, K. M., K. Hadri E. Tzavalis (1999), "The influence of VAR dimensions on estimator biases," Econometrica, 67, 163–181.
  4. Hill JL. 2011. Bayesian nonparametric modeling for causal inference. J. Comput. Graph. Stat. 20:217–40
  5. Burkov A. 2019. The Hundred-Page Machine Learning Book. Quebec City, Can.: Andriy Burkov
  6. J. Filar, L. Kallenberg, and H. Lee. Variance-penalized Markov decision processes. Mathematics of Opera- tions Research, 14(1):147–161, 1989
  7. Chernozhukov V, Demirer M, Duflo E, Fernandez-Val I. 2018b. Generic machine learning inference on heteroge- nous treatment effects in randomized experiments. NBER Work. Pap. 24678
Frequently Asked QuestionsQ: What is the prediction methodology for AIZ stock?
A: AIZ stock prediction methodology: We evaluate the prediction models Modular Neural Network (Market Volatility Analysis) and Stepwise Regression
Q: Is AIZ stock a buy or sell?
A: The dominant strategy among neural network is to Wait until speculative trend diminishes AIZ Stock.
Q: Is AIR NEW ZEALAND LIMITED stock a good investment?
A: The consensus rating for AIR NEW ZEALAND LIMITED is Wait until speculative trend diminishes and assigned short-term Ba1 & long-term Ba1 estimated rating.
Q: What is the consensus rating of AIZ stock?
A: The consensus rating for AIZ is Wait until speculative trend diminishes.
Q: What is the prediction period for AIZ stock?
A: The prediction period for AIZ is (n+16 weeks)

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